ABB Ltd. ABB – a pioneer manufacturer of industrial robots and a leading power and automation company – is now set to aid the expansion of public rail networks across Europe. The company has secured orders worth $85 million from a renowned Swiss train manufacturer, Stadler Rail, which involves expansion of railway networks across Switzerland, Luxembourg and the Netherlands.
Inside the Headlines
Booked in the first quarter of 2015, the order requires ABB to supply traction equipments for energy-efficient trains to aid the expansion initiative. Per the contract, ABB’s traction equipments will be installed in 90 trains that include high-speed, double-decker ‘KISS’ (Komfortabler Innovativer Spurtstarker S-Bahn-Zug) and ‘FLIRT’ (Fast Light Innovative Regional Train) trains. The vehicles are scheduled for delivery by 2016-end.
As part of the latest order from Swiss Federal Railways, ABB will provide energy-saving traction converters that run on integrated power supplies, traction transformers, and battery chargers that will be deployed in 19 new double-decker trains for S-Bahn in Zurich.
Luxemburg State Railways is expanding their Stadler double-decker KISS fleet to facilitate enhanced cross-border service between Luxembourg and Germany. For this project, ABB will extend traction converters and traction transformers for 11 new double-decker trains.
Finally, under the new contract, Dutch State Railways will receive customized compact traction converters with integrated onboard power supplies for its electric Stadler trains from ABB. These trains form the backbone of the Netherlands’ regional transport system.
Previously too, the company’s solid reputation had helped it secure orders from Swiss Federal Railways, Luxemburg State Railways and Dutch State Railways for expansion of their Stadler train fleets.
Bottom Line
ABB’s competitive flexibility, coupled with short delivery-times, has helped it nurture a mutually beneficial relationship with Stadler Rail that holds strong prospects for both companies in the future. Management believes that rising commuter demand enhances the popularity of rolling stock for supporting Europe’s rail infrastructure, and this will represent significant investment opportunities for ABB, going forward.
Profound market knowledge of both companies, combined with state-of-the-art technologies, makes them a popular choice for railway operators across the globe. Moreover, ABB’s history of innovative and energy-efficient technologies has augmented its footprint in the railway sector that includes urban, intercity and high-speed rail networks.
ABB currently generates $1.5 billion from its rail business and the latest order is expected to boost the figure. As the company continues to focus on its ‘Next Level Strategy’ in a bid to increase its foothold in growing markets, we believe its competence will fetch more orders from other leading rail operators in the future.
Zacks Rank
ABB currently has a Zacks Rank #3 (Hold). Better-ranked stocks in the broader industrial goods sector include II-VI Incorporated IIVI, Dycom Industries Inc. DY and Capstone Turbine Corp. CPST. While II-VI Incorporated and Dycom Industries sport a Zacks Rank #1 (Strong Buy), Capstone Turbine holds a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment