In a move that could escalate its trade war with China, the US has put in plans to restrict exports to a state-backed Chinese company Fujian Jinhua that makes semiconductors. The move could add further strain to a bilateral relationship which has seen a standoff between both countries on trade and market access.
In a statement released by the US Commerce Department, the agency said that the Fujian Jinhua Integrated Circuit Company will require a special license before it can procure components from American manufacturers.
The statement from the agency reads in part:
“The Department of Commerce has taken action to restrict exports to Fujian Jinhua Integrated Circuit Company, Ltd. [Jinhua] by adding them to the Entity List [Supplement No. 4 to Part 744 of the Export Administration Regulations (EAR)], because Jinhua poses a significant risk of becoming involved in activities that are contrary to the national security interests of the United States.”
Speaking on the ban, Commerce Secretary Wilbur Ross stated:
“When a foreign company engages in activity contrary to our national security interests, we will take strong action to protect our national security.”
According to Ross, the ban on Fujian Jinhua will limit the firm’s ability to threaten the supply chain for components used in America’s military systems.
Fujian Jinhua Is a Security Risk
The agency went on further to state that Fujian Jinhua poses a security risk as it could flood the market with cheaper semiconductors made by American companies that supply the US military.
If this happens, American manufacturers for that component might go out of business and it could lead to the military sourcing components from abroad for items that should be procured within the country.
This move by the Commerce Department comes on the heels of a federal lawsuit filed by Idaho based Micron Technology, against Fujian Jinhua, accusing the Beijing-based company of stealing its trade secrets last December.
Fujian Jinhua fired back with its own countersuit in a Chinese court in January. The US government had also put a ban on Chinese smartphone manufacturer ZTE, accusing the tech company of deceiving American officials, by claiming to have punished employees who flouted US sanctions against Iran and North Korea. The ban was finally lifted after ZTE agreed to put in more oversight measures and pay a $1-billion fine.
Fujian Jinhua is an advanced chip manufacturing enterprise that has state backing from the provincial government where it’s located. According to state media, the chip manufacturing company is currently building a $5.7 billion chip factory in the province.
The UK sandwich giant Pret A Manger will pay $875,000 to settle claims with its underpaid staff in New York. Earlier this month, employees filed a class-action lawsuit against the company, accusing the fast-food chain of violating US labor laws through an illegal practice called “time-shaving.”
Pret A Manger Rounded Down Working Hours to Pay Less
According to its employees, Pret A Manger wanted to profit from its staff by altering time records. The sandwich seller tried to avoid paying employees for part of the hours they worked, as well as overtime rates.
After some mediation, staff managed to squeeze $875,000 in unpaid compensation out of the company, according to The Times.
It’s the second time Pret A Manger has been forced to pay almost $1 million to settle wage claims with American employees. Back in 2014, 4,000 staff members from New York filed a similar lawsuit against the fast-food chain to recuperate their money.
Just like this time around, employees hadn’t received overtime pay for the hours worked. In the first lawsuit, staff also accused Pret A Manger of illegal tip-pooling and not providing them with the appropriate wage statements. For the first settlement, the restaurant chain paid $910,000. The company did not admit liability, however.
But with the reputation of being a bad employer, the picture doesn’t look too good for the sandwich-making giant, although, the company insists that they treat staff correctly and offer fair pay. A spokesperson for Pret A Manger told City AM:
“We are absolutely committed to making sure all our team members are paid for all the hours that they work.”
Several Lawsuits for Pret A Manger
Whether that statement was dealt with any real conviction or not remains to be seen, since Pret A Manger seems to be leaping from one scandal to another. Although, most of them appear to be caused by inadequate labeling.
Top management faced criticism after boss Clive Schlee failed to deal with the disaster generated by the death of Natasha Ednan-Laperouse.
The teenager died in 2016 due to an allergic reaction caused by some of the ingredients used in preparing the baguette her sandwich was made with.
The investigations following the girl’s death revealed that the labeling on the food was unclear, generating a wave of anger against the brand in the UK and abroad.
The company is also battling another two lawsuits in the US, both for misleading customers by labeling products containing chemical substances as “natural.”
Pret A Manger is known for using the same practices in the UK, where sandwiches are labeled as products that don’t contain preservatives, despite not meeting these characteristics.
The company belongs to JAB Holdings, a Luxembourg-based investment fund, owned and managed by Germany’s billionaire Reimann family.
The fund bought the fast-food chain this spring for $2 billion. Let’s hope they won’t see the name change soon to Pret A Fermer.
The UK has finally rained on the parade of tech giants operating in its shores without paying taxes. Or at least, they will be starting in 2020. The government said that they will be introducing dramatic changes to how large tech companies are taxed to ensure that they pay their fair share.
UK chancellor Philip Hammond made the announcement on Monday that the UK would soon be taking action with a “digital services tax” enforced by 2020.
This measure will help the country raise some £400 million per year ($510 million) and was necessary to ensure fairness in the tax system. The chancellor said:
“It is only right that these global giants with profitable businesses in the UK pay their fair share.”
About time too considering that companies like Amazon and eBay have been operating in the country for years either without paying a dime in taxes or by making next-to-zero contributions.
The nature of internet businesses that undercut retailers with cheaper products has caused much anger from businesses in the UK both large and small for not paying corporate taxes and for creating an unfair competitive advantage.
How Will the Digital Services Tax Work?
The UK will impose an additional 2% tax on any revenue generated in the UK from search engines, online marketplaces, and social media platforms.
If Facebook was starting to feel unwelcome in Europe after being fined in a German court for data infringement and facing a GDPR fine of up to $1.63 billion, this latest announcement will serve as another blow to Zuckerberg & Co.
It should be noted that the tax will only apply to profitable companies with global annual revenues of at least £500m ($635 million).
The chancellor also said that the UK is open and committed to incorporating international reforms on digital services tax, however, until such time as an agreement had been reached, UK taxes would apply.
A lawyer working with Clifford Chance quoted in FT said that the new law directly targeted at the likes of Facebook, Google, Apple, and Amazon was:
“A clear attack on the large internet companies.”
With the exception of Spain, who introduced a draft last month to impose a digital services tax by next year, the UK’s new measures on digital tax are the among the strictest yet.
Possible Global Backlash
The UK proposal will be investigated by the European Commission, and we all know how swimmingly the UK gets on with them. If the measure is seen as protectionist, it could trigger considerable backlash from the EU since it is unlikely that any British company will be affected by the measure.
The US may also react negatively to the digital services tax, seeing it as a direct attack on its companies in one of its more successful industries.
While many retailers across Britain will welcome the news as leveling the playing field a little, some see the tax as a potentially dangerous move that could impact technology innovation in larger companies–and even spark a trade war at a time when the country is losing allies fast.
Although HSBC’s earnings in Q3 slightly missed expectations, they were still up 28% on Q3 last year. Despite the growth, HSBC share prices are down 20% since the beginning of 2018.
HSBC hit pre-tax profits of $5.9 billion for Q3 from revenue of $13.79 billion. Revenue is up 6.32% illustrating cost savings within the bank have resulted in a greater profit share. Actual operating expenses were $7.96 billion down from $8.55 billion in Q3 2017.
In HSBC’s earnings statement CEO John Flint said:
“These are encouraging results that demonstrate the revenue potential of HSBC.”
HSBC’s shares are listed on both London and Hong Kong Stock Exchanges, its share price for both listings has declined by over 20% during 2018. The fall is mainly attributed to global economic uncertainty stemming from trade woes.
In Hong Kong, HSBC shares have risen today by 5% and in London by 5.63% so far.
HSBC Stock today
Recent Profits from Asian Markets
HSBC is currently employing a “pivot to Asia” strategy which also seems to have yielded results. Three-quarters of Q3 profits originate from Asian markets.
CEO Flint and HSBC chairman Mark Tucker are still in their first year of leading the banking giant. Flint says although there are concerns over trade disputes between the US and China, an offshoot is likely to be more growth in trade within Asia itself.
HSBC’s Long-Standing Relationship with Saudi Arabia
HSBC is the largest overseas bank operating in Saudi Arabia and was a key sponsor of the country’s Future Investment Initiative “Davos in the desert.” Despite being a sponsor, CEO Flint made the decision not to attend saying:
“It was not an easy decision, but it was the right thing to do in the circumstances.”
Flint has defended HSBC’s operations in Saudi Arabia due to HSBC’s 1950’s onward, long history in the oil-rich economy. Flint said:
“We have 4,000 employees in Saudi Arabia and many customers, so we have a responsibility to them.”
Flint, aged 50, took over as CEO of HSBC in February 2018 after working at the bank for nearly 20 years. 14 of which were spent developing Asian markets.
In 2004, he was responsible for integrating HSBC’s investment activities under “HSBC Global Asset Management,” and went on to become the division’s CEO in 2010. Flint receives a salary of around $2.9 million.
HSBC is the largest bank in Europe and the seventh largest globally with assets under management of over $2 trillion. Its market value as a company is over $200 billion.
Snap Inc., developer of the infamous social media app Snapchat, lost 1% of its users in the third quarter of 2018. Its stock also declined by 17.5% on Friday, before clawing back up to negative 10%. Snapchat currently entertains 186 million users, with more than 200 billion Snaps (images) saved by users in their Memories.
Snapchat’s Decline After a Controversial Redesign
In the second quarter of 2018, 3 million users left Snapchat for various reasons. The majority of these people voiced their frustration with the redesign of the app in November 2017.
Prior to the update, Instagram had introduced Stories for its users as well. However, it wasn’t able to attract many people until Snapchat revamped their app.
While people were trying to familiarize themselves with the redesign, various celebrities took to social media to criticize the app. On February 2018, Kylie Jenner, reality TV star and owner of Kylie Cosmetics, asked her followers on Twitter whether she was the only one who wasn’t opening Snapchat anymore.
sooo does anyone else not open Snapchat anymore? Or is it just me… ugh this is so sad.
Due to her tweet, Snapchat’s stock went down by 7.2% and it lost over $1.3 billion in market value.
The nightmare didn’t end there. Snapchat came under scrutiny for allowing an ad which asked users whether they would “Slap Rihanna” or “Punch Chris Brown.”
Famous singer Rihanna took to Instagram to criticize Snapchat for making fun of domestic violence victims and urged her fans to delete the app altogether.
Snap Inc. Struggles to Remain Relevant
According to the third quarter report published by Snapchat, the company’s revenue has increased to $298 million. Snapchat has also partnered with media companies such as CNN to deliver news and added 21 different shows on Discover. Snap Inc. is also introducing a desktop app for Windows and MacOS.
Another interesting feature is a result of the partnership with Amazon, whereby users will be able to buy products by simply taking a picture of them from the Snap camera.
Hooked, an app that provides stories in the form of texts has also joined hands with Snapchat to release a science fiction and thriller series Dark Matter. The story was made available on Discover on October 26 and will be updated on October 30.
Last week, Snap Inc. announced that former Amazon and Huffington Post executives, Jeremi Gorman, and Jared Grusd, were welcomed to the roles of chief business officer and chief strategy officer.
The announcement came after the ex-chief strategy officer Imran Khan left his position in September 2018. Khan’s salary was recorded to be $441,923 in 2017. The company also gave him a ‘stock performance award‘ worth $100 million in the same year.
Things are going from bad to worse for China this year. A survey released today by the American Chamber of Commerce (AmCham) South China revealed that over 70% of US companies with operations in the region are either delaying further investment or seriously considering relocation of their manufacturing facilities to other countries.
As the US-China trade war begins to eat into profits, American companies are particularly affected by the ongoing dispute.
The AmCham surveyed 219 companies in Southern China, of which one-third came from the manufacturing sector.
A massive 64% of companies were looking into relocation outside of China, although just 1% said that would mean reestablishing bases in North America.
64% of US companies thinking of relocating operations
On top of that, almost three-quarters of American businesses in Southern China are stalling investment in the country, while just half of their Chinese counterparts are taking a similar stance.
Although, that also means that some 50% of Chinese companies in Southern China are also looking for more affordable pastures, with Southeast Asia in view.
Rising Competition from Foreign Rivals
US companies surveyed reported facing rising competition from countries like Germany and Japan, as well as cheaper production in India and Vietnam. Harley Seyedin, President of AmCham South China, told Reuters:
“It could very well be that people are holding back on placing orders until times are more certain or it could very well be that they are shifting to other competitors who are willing to offer cheaper products, even sometimes at a loss, in order to get market share… One of the most difficult things about market share is once you lose it, it is very hard to get back.”
The companies that have been hardest hit by rising US tariffs are those in the retail and wholesale sectors, whereas companies suffering worse from the hiked Chinese tariffs hail mainly from the agriculture-related sphere.
The AmCham survey was held between September 21 and October 10, shortly after US tariffs became applicable on some $200 billion worth of Chinese goods and a Beijing response imposed tariffs of their own on $60 billion of US, leading to the trade war that’s damaging both economies.
No End in Sight for US Firms in Southern China
At the current time, there is no end in sight to the trade war, with the US set to impose further tariffs at the start of next year. While the signs are not looking good for US businesses in China or the export-reliant cities they operate in, President Trump is expected to meet with President Xi Jinping at the G20 summit next month. It is hoped that they will come to some kind of amicable agreement.
The biggest concern of the companies surveyed was that the rising cost of goods would result in reduced profits. One-third of companies already reported that the trade war had affected volumes ranging from $1 million to $50 million, with 10% of manufacturers reporting a higher volume loss in excess of $250 million.
IBM Corp. announced on Sunday that it would be acquiring US software company Red Hat Inc. in a deal worth $34 billion. While IBM is no stranger to acquisitions, this will be the largest for the company so far, as it looks to leverage Red Hat’s specialist hardware technology knowledge and consulting business for higher profit margins.
This latest acquisition also demonstrates IBM CEO Ginni Rometty’s focus on expanding into subscription-based offerings in the face of slowing growth from its own software sales and declining demand for mainframe servers.
IBM currently has a market cap of $114 billion and will pay $190 per share in cash for Red Hat, which is a 63% premium on Friday’s closing share price at $116.68.
Red Hat shares on Friday.
About Red Hat Inc.
A pioneer in opensource technology, Red Hat Inc. was founded in 1993 and specializes in Linux operating systems, still the most popular open-source software today as an alternative to Microsoft Windows.
Red Hat works on a subscription model and charges fees to its corporate customers for technical support, maintenance, and certain custom features.
In a choppy environment up in the clouds, Red Hat is one of a small few groups of cloud computing companies that have both free cash flow and revenue growth. In an interview with Reuters, IBM CEO Rometty said:
“This acquisition we are clearly doing for growth synergies. This is not about cost synergies at all.”
This type of acquisition makes sense for older technology companies like IBM in a bid to gain scale, as the main competitors in the space begin to gobble up market share.
While the company has a lot of ground to catch up on, IBM is hoping to compete on the same scale with the likes of Amazon, Microsoft, and Alphabet.
For context, IBM has lost nearly one-third of their share value in the last five years, while Red Hat has gained some 170% in the same period.
Red Hat shares over last 5 yearsIBM shares over the last 5 years
About IBM
IBM has been around for over a century, founded in 1911. Known in the industry as Big Blue due to its hallmark blue computers, the company has been facing dwindling profits for years and is transitioning from a legacy computer maker to a player in the emerging technologies space.
Some of these recent initiatives from IBM have been AI-powered IBM Watson and the IBM Hyperledger blockchain.
Other long-standing tech companies are also looking to compete in a new era through acquisitions, as showcased in Microsoft’s acquiring of Github this year and Adobe Inc acquiring Marketo.
If all goes according to plan, the deal with Red Hat will close in the second half of next year.
Forget about bendy phones and 5G, the latest hiccup on the horizon for tech giant Apple is an illegal teen labor case. The company has launched its own investigation after getting clobbered by a complaint from Hong Kong-based human rights group, Sacom.
Apparently, one of Apple’s suppliers in Taiwan, Quanta Computer, has been employing students illegally to assemble parts for Apple Watches in a Chongqing factory in mainland China.
Sacom said they had interviewed some 28 high school students at the Quanta Computer factory during the summer. The students reported being sent over to the factory by their teachers to take up internship positions. However, their duties were the same as full-time assembly line workers.
All of the students interviewed said that they were forced to work night shifts and overtime, which is illegal for student internships under Chinese law.
A further 11 of the students said that they would not be able to graduate from high school if they did not complete the internship. One student was quoted by Sacom as saying:
“We are scheduled to work at night, from 8pm to 8am. Only one day off is allowed per week.”
Questions About How Apple Manages Its Supply Chain
Tim Cook may have been vocal over protecting user data, but what about protecting its workers throughout the supply chain? Using young students as robots and forcing them to work 12-hour night shifts is hardly a solid foundation for Apple’s high principles.
Apple is known as one of the better companies when it comes to supply-chain management, publishing a yearly list of suppliers to highlight its seriousness over monitoring its overseas partners. But that doesn’t seem to be enough.
Just last year, labor violations were uncovered in the supply chain for Apple’s iPhone (also made in China) at the Foxconn Zhengzhou factory. Both Foxconn and Apple admitted that students had worked overtime against Chinese labor law–and also stated that they would put an end to using student interns to work long hours.
In response to Sacom’s allegations over the Quanta factory, a spokesperson for Apple said:
“We are urgently investigating the report that student interns added in September are working overtime and night shifts. We have zero tolerance for failure to comply with our standards and we ensure swift action and appropriate remediation.”
Rising Costs Often Equals More Teen Labor
As reports of an economic slowdown in China, the trade war with the US and rising tariffs, companies’ profit margins are continually squeezed. This often sees a spike in cases of child labor in China’s factories.
Some activists even report that local governments encourage schools to supply factories with teen labor to attract investment to their area.
Moreover, in October when Apple tends to announce its newest products, the factories see a surge in demand for labor that they cannot fill by hiring temporary employees under Chinese law, which leads to a rise in illegal internships.
During the Tesla Q3 earnings Q&A webinar, Elon Musk was questioned on the gross margin for the Model 3 by Pierre Ferragu of New Street Research. Other “analysts” on the call included Adam Jonas of Morgan Stanley, Dan Galves of Wolfe Research, and CNBC’s Phil LeBeau. The analyst from Morgan Stanley started his questioning with a dig at CEO, Musk.
“… as the company conducts its search for a new Chairman, what are the attributes, experiences of that person that you think would be a best shared or best value for Tesla?”
Musk, noticeably offended, pushed him for an alternative question on operational matters. Many analysts were wide of the mark with their forecasts for Tesla Q3 earnings. The median forecast was another loss-making quarter for Tesla Motors. During the one hour webinar, several questions came up on the better-than-expected gross margin. Analysts were trying to justify their inept forecasting.
Chief Financial Officer, Deepak Ahuja, in an earlier earnings call had stated profitability would come from their improved gross margins on the Model 3. It was widely known that the revenue mix swung significantly from the Model S and X to the Model 3 in the quarter.
This was reinforced in the Model 3 teardown conducted by Sandy Munro of Munro & Associates. Previously, Munro had criticized the build quality of the vehicle, but his final analysis was very different. Munro assessed the gross margin for the Model 3 at a staggering 30%. Well ahead of the “financial analysts” crunching their numbers.
In June, Musk took to Twitter when news leaked that 9% of the workforce was to be offloaded. Some of these cost savings probably came through in Q3.
Choose Your Analyst Carefully
Market analysts, on the whole, got the Tesla Q3 earnings wrong. The internet is awash with opinions on the earnings with some asking if the numbers are accurate. One YouTube channel held their own Q&A session straight after the webinar. One viewer asked:
“Is there any way that Tesla could have manipulated or event [sic] faked the numbers in their earnings call or is there some overseight [sic] from agencies?”
The host pointed out it would mean jail time if the earnings were false and those involved are not that stupid. Interim results are not just provided for investors. Quarterly statements are required by the SEC, and indeed it would be very foolish to “cook” the books.
However, accountancy is not an exact science. Errors do occur, and accounting principles can be “modified,” subject to auditors’ approval. When executives own a significant share of the company’s stock, they might be tempted to do an “Enron.”
Small owner-occupied businesses tend to understate their earnings to reduce tax liabilities. Whereas larger corporations have done the opposite to boost the stock price.
In my very early days as a junior accountant, I was told an interesting tale about one of the largest engineering companies in the world. For some unknown reason, one of their many subsidiaries wanted to show lower earnings for the current accounting period. This was achieved by loading up a fleet of trucks with finished goods on the day the auditors attended the annual stock count.
Analyst Harris Kupperman Calls Tesla Q3 Earnings a Fraud
When you read an analyst’s report decide for yourselves if they have a hidden agenda. Some are short selling the stock. Others have a grievance with the executives, and some are just poor analysts. Harris Kupperman scores highly on the latter. Kupperman’s blog site states:
“I’ve been successfully investing in the markets for over two decades. In 2003 I started a hedge fund, Praetorian Capital, so that others could invest alongside me.”
How he can be a successful trader with little or no understanding of financial statements is beyond me. Following the release of Tesla Q3 earnings, he published an article on his blog which was also covered by ZeroHedge. Part of the mission statement for ZeroHedge is:
“to widen the scope of financial, economic and political information available to the professional investing public.”
They are certainly widening the “scope” with Kupperman’s shoddy analysis. It’s abundantly clear that he hasn’t studied the published accounts for Tesla. Strangely, the full year accounts don’t seem to be available on Tesla’s website. The weighty 276-page report for the year ending December 2017 is widely available on other sites.
Kupperman starts his review of the earnings figures with:
“While I am certain that Tesla collapses in the near future, all evidence seems to show that they’ve used every trick from every financial fraud over the past 100 years to put lipstick on the Q3 financial results.”
Why Kupperman Is Wrong
Kupperman goes on to illustrate his lack of knowledge by proclaiming the earnings are false because depreciation per car in Q3 was almost half that of Q2. Kupperman’s cursory glance of the financial statements probably picked up the entry towards the top of page 78:
“Depreciation for tooling is computed using the units-of-production method whereby capitalized costs are amortized over the total estimated productive life of the respective assets. As of December 31, 2017, the estimated productive life for Model S and X tooling was 250,000 vehicles based on our current estimates of production. As of December 31, 2017, the estimated productive life for Model 3 tooling was 1,000,000 vehicles based on our current estimates of production.”
I have reproduced the calculations done by Kupperman but for clarity switched to $m rather than $000, except for the depreciation per car.
Two glaring mistakes by the analyst. Firstly, the mix of vehicles changed dramatically from Model S and X to Model 3. The Model 3 being depreciated over 1 million vehicles compared with just 250,000 vehicles for the S and X. This would significantly reduce depreciation despite the doubling of the total number of cars sold.
Tooling Costs
Secondly, the original cost of tooling in December 2017 was just $1.3 billion. Whereas the total asset costs are close to $18 billion. Pages 89 and 90 of the financial reports show the historical costs for solar energy systems and property, plant and equipment. Some of these fixed assets are depreciated over decades, especially the big-ticket items. They are not written off based on cars produced in the quarter.
The figures for depreciation picked up by Kupperman are the total for all assets depreciated and not just the $1.3 billion of tooling. The financial records do show a further $2.5 billion of assets in construction. Some of which ultimately will be depreciated as tooling. Also, further tooling costs from Q1 to Q2 would be depreciated in Q3. However, we don’t have a breakdown of these figures from the interim results. It is my opinion that Kupperman’s assertion that the Tesla Q3 earnings are fraudulent is without basis.
Swiss robotics expert ABB is investing $150 million to build a new robotics factory in Shanghai, China, that will make 100,000 robots per year. Its CEO is confident the company’s momentum will be reflected in future share performance.
The new factory will account for one quarter of ABB’s rising global demand for its robots and include a full research and development center in artificial intelligence and machine learning. It will be largest of ABB’s factories producing anything from ABB’s small robots to ones that can lift the weight of a car.
ABB has also signed a strategic cooperation agreement with the Shanghai government, according to reports by the South China Morning Post, who spoke with ABB CEO Ulrich Spiesshofer on his sixth visit to China this year.
The agreement with Shanghai’s government will see ABB supporting the city’s industry, energy, transport, and infrastructure.
Along with Mitsubishi and Fanuc, ABB is one of the largest suppliers of industrial robots, software, equipment, and installation services. It’s represented in 53 companies and has installed over 400,000 robots to date. The new factory in Shanghai, producing a further 100,000 per year from 2020 gives an indication of the growth of the sector.
In June 2018, ABB introduced its new range of smaller robots that work alongside people in manufacturing and production facilities.
China is ABB’s second-largest market globally for ABB producing $6 billion in revenue annually and out-growing its other markets with a 13% rise in total orders.
According to the International Federation of Robotics (IFR), the country has had more robots in its factories and facilities than any other country since 2016. By 2020, IFR expects China to have 950,300 industrial robots in operation.
ABB has been a global Fortune 500 company for 24 years and its shares are traded on the Swiss, Stockholm, and New York stock exchanges. The company’s recently released third-quarter revenue results, at just over expectations, didn’t quite inspire investors and ABB’s shares have now lost a quarter of their value this year.
ABB has been hit by the slowdown in China and has an order book of nearly $9 billion, slightly short of the over $9 billion market expectations. Spiesshofer told Reuters on October 24, 2018:
“If you take the transformation of ABB, that has progressed as all the momentum shows. It is very clear out of the orders there needs to come the revenue and the profit and that is our ambition for the next quarters.”
