Shares of ABB Ltd. declined nearly 6% during morning trading in Switzerland, following the company’s report of weak second-quarter orders. Despite this, the Swiss engineering firm saw increased profit and revenues due to robust demand.
Looking ahead to the third quarter, ABB anticipates a sequentially higher growth rate in comparable revenues, with the operational EBITA margin expected to be around 18.5% or slightly below. For fiscal 2024, the company maintains its projection of approximately 5% growth in comparable revenues and an operational EBITA margin of about 18%.
Björn Rosengren, ABB's outgoing CEO, remarked, "In the second quarter, demand was solid and the Operational EBITA margin reached an all-time high of 19%. I am confident that ABB will continue to deliver long-term shareholder value in line with its targets, as Morten Wierod takes over as CEO next month."
In its second quarter, ABB's net income attributable to the company surged 21% to $1.10 billion, up from $906 million the previous year. Basic earnings per share increased 22% to $0.59, compared to $0.49 last year. Operational EBITA rose 10% year-over-year to $1.56 billion, and the operational EBITA margin improved by 1.5 percentage points to 19%, up from 17.5% last year, driven by higher volumes and favorable pricing.
Revenues saw a 1% increase to $8.24 billion, compared to $8.16 billion the previous year. Comparable revenue growth was 4%. However, orders declined by 3% to $8.44 billion from $8.67 billion the prior year, with comparable orders remaining flat.
The company noted that strong order growth in the Electrification and Process Automation business segments was counterbalanced by weaknesses in the discrete automation-related Machine Automation division and the E-mobility business.
As of the latest trading session in Switzerland, ABB shares were priced at 48.23 Swiss francs, down 5.8%.
