On Tuesday, ABB (ST:) LTD announced a slight increase in orders and revenue for the third quarter of 2024, with orders climbing to $8,193 million, marking a 2% rise on both a reported and comparable basis. Revenues also saw a similar 2% increase, reaching $8,151 million. The company’s income from operations rose to $1,309 million, resulting in a margin of 16.1%, while operational EBITA stood at $1,553 million, translating to a robust margin of 19.0%.
The company’s basic earnings per share (EPS) improved by 8%, hitting $0.51 but missed the consensus of $0.53. Notably, ABB maintained a stable cash flow from operating activities at $1,345 million. Gross profit experienced a significant jump of 13%, amounting to $3,116 million, which raised the gross margin by 3.5 percentage points to 38.2%.
ABB’s CEO, Morten Wierod, expressed confidence in the company’s trajectory, highlighting the strong performance in Electrification which more than compensated for weaker segments such as Robotics & Discrete Automation and E-mobility. Despite some areas not operating at full potential, ABB matched its record Operational EBITA margin of 19.0%. The company’s free cash flow for the year to date reached $2.6 billion, positioning ABB to meet its $3.7 billion target for the year.
The company’s book-to-bill ratio remained positive at 1.01, bolstered by the Electrification and Process Automation business areas. The order intake’s 2% growth was supported by short-cycle orders, with customer segments in data centers, utilities, and infrastructure showing strong demand. However, the revenue growth, primarily affected by the discrete automation business, was lower than expected.
ABB also announced the completion of two acquisitions aimed at expanding its offerings. The Födisch Group acquisition enhances ABB’s industrial emission measurement solutions, while the acquisition of SEAM Group strengthens its asset management and advisory services.
Looking ahead to the fourth quarter of 2024, ABB anticipates low to mid-single-digit comparable revenue growth and expects the historical pattern of a negative book-to-bill and a sequentially lower Operational EBITA margin. For the full year, the company forecasts a positive book-to-bill, comparable revenue growth below 5%, and an Operational EBITA margin slightly above 18%.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.