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ABB & Fluor to Build Power Substation Projects Worldwide

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Swiss engineering giant ABB Ltd. has joined forces with engineering and construction firm – Fluor Corporation (FLR - Free Report) – to cater to the growing needs of power grids worldwide for safe, reliable and state-of-the-art electrical substations.

Through this strategic partnership, ABB and Fluor will execute large turnkey engineering, procurement, construction (“EPC”) electrical substation projects.

Substations are crucial elements in power grid infrastructure, as they enable the efficient transmission and distribution of electricity. They connect power stations to the grid, control and protect power flows, and link transmission and distribution networks as well as end users.

The venture will leverage on ABB’s leading technology and its leadership position in power transmission and distribution, along with Fluor’s capability and experience in delivering large EPC projects. Thus, the alliance can bring integrated solutions and unique synergies to clients in the substation market.

The companies intend to capitalize on the huge prospects unlocked by the ongoing energy revolution and the related power infrastructure investments through this partnership.

ABB is an established leader in air-insulated, gas-insulated and hybrid substations (with voltage levels up to 1,200 kV). The company’s substations facilitate efficient transmission and distribution of electricity, with the least environmental impact. They cater to a broad range of customers, like utility, industrial and commercial, as well as sectors like renewables, railways and urban transportation.

ABB LTD-ADR Price and Consensus

ABB has also inked an agreement to partner with Aibel to deliver offshore wind integration solutions. Per the agreement, Aibel will be responsible for turnkey EPC services for the design, construction, installation and commissioning of the offshore platforms. On the other hand, ABB will focus on high voltage direct current technology.

Such strategic alliances form a core pillar of ABB’s Next Level strategy to drive growth. Currently, it is undergoing active portfolio management to make its core power grids business simpler, stronger, and more focused.

Late last month, ABB took the first major step in the strategic evaluation of its massive Power Grids division, as it decided to sell its global high-voltage cable system business to NKT Cables in a deal worth about $934 million.

ABB presently carries a Zacks Rank #3 (Hold).

Stocks to Consider

Some better-ranked stocks in the same space include EnerSys (ENS - Free Report) and AO Smith Corp. (AOS - Free Report) , both holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Industrial battery maker, EnerSys has a modest earnings beat history, having surpassed estimates thrice in the four trailing quarters, with an average positive surprise of 2.2%.

Commercial and residential water heating equipment manufacturer, AO Smith Corp., has a robust earnings beat history, with an average positive earnings surprise of 6.3% over the trailing four quarters, beating estimates all through.

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