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ABB Ltd (ABB) Clinches Order for UK-France Power Link

ABB Ltd ABB recently announced that it has secured an order from the UK grid operator, National Grid and Réseau de Transport d'Electricité, to provide its proprietary HVDC (high-voltage direct current) technology. The €270 million worth order will help in integrating electricity networks of France and the UK.

Per the order, ABB will offer two high-voltage direct current HVDC Light converter stations, one each to France and England, connected with a subsea cable. Stretching a distance of 240 kilometers between the stations, the 1000 megawatt capacity link runs from Chilling, Hampshire, in England to Tourbe in France. The stations will also feature ABB’s advanced MACH control and protection system to protect the link from unexpected disruptions.

The HVDC Light technology will ensure that the UK-France power link can regulate power fluctuations, reduce operational costs and provide reliable electricity for clients.

As a matter of fact, with about 110 HVDC projects under its belt, ABB has earned an impressive reputation among clients in more than 15 countries to transport huge megawatts of power over long distances, with minimum energy loss.

One of the leading industrial infrastructure, power and automation companies in the world, ABB has gained substantially from surging investments in power infrastructure upgrades. Year to date, ABB’s shares returned 10.5%, slightly above the Zacks categorized Machinery-Electrical industry’s average gain of 8.2%. The company has a stellar earnings surprise history, with an average positive surprise of 14.3%, beating estimates each time over the trailing four quarters.

ABB is bullish about high investments in ultra HVDC power transmission projects in mature and emerging markets as well as continuing investments in maintenance of aging electric infrastructures. This apart, the company’s revamped version of “Next Level Strategy”, launched in third-quarter of 2016, is expected to boost growth.

In the first two stages, ABB focused on elaborate reshuffling to prune its business. Currently, it is focusing on the third stage, which involves strategic acquisitions and other major investments to fortify position in key end markets. These developments are also expected to offset some major weaknesses, including sluggish industrial spending, volatility in oil and gas markets and currency fluctuations, which pose as headwinds for the Zacks Rank #3 (Hold) company.

Stocks to Consider

Better-ranked stocks in the broader sector include EnerSys ENS, The Middleby Corporation MIDD and Donaldson Company, Inc. DCI. All three stocks hold a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank  (Strong Buy) stocks here.

EnerSys surpassed earnings estimates each time in the past four quarters, with an average positive beat of 4.4%.

Middleby Corporation beat earnings in each of the trailing four quarters, resulting in an average surprise of 14.1%.

With three beats over the trailing four quarters, Donaldson has a positive average earnings surprise of 5.9%.

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ABB Ltd (ABB): Free Stock Analysis Report
 
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Donaldson Company, Inc. (DCI): Free Stock Analysis Report
 
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