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ABB Ltd. (ABB) to Upgrade Hydro-Quebec's Transmission Grid

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Swiss technology giant, ABB Ltd. (ABB - Free Report) , recently clinched orders over $85 million from utility firm Hydro-Québec (“HQ”) for upgrading the latter’s substations and transmission grid. The latest contract is another major win for ABB’s thriving ultra-high voltage transmission business.

Hydro-Québec Revamps Infrastructure

Canada-based utility company – HQ – has been constantly modernizing its power infrastructure for the past few decades. ABB has been serving as its long-standing partner, delivering state-of-the-art technology required to execute the utility firm’s infrastructure revamp. Currently, the company is upgrading its 800-kilovolt (kV) air-insulated switchgear (AIS) substations and transmission grid, which require sophisticated circuit breakers, power transformers and shunt reactors.

Per the contract, ABB will offer services for the designing, delivering and commissioning of circuit breakers that would boost safety levels. Also, the company will be providing its proprietary 450 megavolt-ampere (MVA) autotransformers and 735 kV shunt reactors for the project. The technology giant boasts of an elaborate cost- and eco-efficient circuit breaker and transformer portfolio, which has earned it a solid reputation among utility companies across the globe.

Power Infrastructure Upgrade: A Key Growth Driver

ABB is one of the best managed industrial infrastructure, power and automation companies in the world, which stands to benefit from investments made toward the upgradation of power infrastructure..Utility companies across the globe are engaged in integrating renewable energy sources with the traditional ones to meet the ever-increasing power demand.

Going forward, ABB anticipates gaining significantly from high investments in ultra high-voltage DC power transmission projects in mature and emerging markets. Also, continuous investments by clients in the maintenance of aging electric infrastructures are driving the company’s growth. In the long run, utility customers are expected to act as one of the strongest catalyst for this Zacks Rank #3 (Hold) stock, the other two being industry and transport & infrastructure.

Stocks to Consider

Better-ranked stocks in the same space include EnerSys (ENS - Free Report) , AO Smith Corp. (AOS - Free Report) and Schneider Electric (SBGSY - Free Report) . 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.

Industrial battery maker, EnerSys has a modest earnings beat history, having surpassed estimates thrice over 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 surprise history, with an average positive earnings surprise of 6.3% over the trailing four quarters, beating estimates all through. 

Energy management and automation solutions provider, Schneider Electric SE, has a modest expected EPS growth rate of 3.1%.

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