ABB Ltd. (ABB) has one of the most promising power infrastructures across the globe. The company has assisted many leading power plants in strengthening their existing power grid by supplying transformers. In the last reported quarter (third quarter 2013), both the Power Products and Power Systems divisions were the primary contributors to revenues with 7% and 10% growth, respectively.
On Dec 20, the company received an order from Poland worth $37 million to augment its national power grid. Shares of ABB rose 2.6% following the news. Poland’s state-owned transmission system operator, PSE, S.A., placed the order with ABB. As per the deal ABB is required to supply 12 low loss, low noise power transformers to the existing power grid in Poland.
Transformers are key components of an electrical grid and are essential for efficient and safe conversion of electricity between diverse voltage systems. ABB’s transformer portfolio primarily comprises power transformers rated up to 1,200 kV, dry and liquid-distribution transformers, traction and special application transformers as well as related services and components.
Power transformers are primarily required to adjust voltage levels across the power value chain. This includes increasing the voltage level at the generation stage to reduce losses during long-haul transmission, and lowering the voltage to safe and manageable levels prior to distributing electricity to homes, factories and offices.
As per the contract, ABB is responsible for the design, supply, installation and commissioning of the transformers, each weighing approximately 360 metric tons. These transformers will be installed in 11 substations across the country. Out of these some substations are new installations while others require upgrading. ABB expects to complete the delivery of the 12 transformers between 2014 and 2017.
Prior to this, ABB has already installed 60 transformers in Poland and has a huge manufacturing footprint there. Based in Zurich, Switzerland, ABB is a leader in power and automation technologies that enable utility and industry customers to improve performance while lowering the environmental impact.
ABB currently has a Zacks Rank #3 (Hold). However, other stocks which are worth considering at the moment are Enersys (ENS), VSE Corp. (VSEC) and Quanta Services, Inc. (PWR). Enersys and VSE both have a Zacks Rank #1 (Strong Buy) while Quanta has a Zacks Rank #2 (Buy).
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