ABB Shares Slip After Results Fall Short of Expectations

By Adria Calatayud

Shares of ABB fell after the European technology and engineering giant reported third-quarter results that fell short of consensus expectations at the top and bottom lines, and flagged weakness in its robotics segment.

At 0751 GMT on Wednesday, ABB's shares in Zurich traded 5.6% lower at CHF30.84.

The company's quarterly net profit jumped to $882 million from $360 million in the same period last year, when it was hit by a provision related to a legacy South Africa power project. Revenue rose to $7.97 billion from $7.41 billion, and grew 11% on a comparable basis.

Analysts expected ABB to report a net profit of $919 million on revenue of $8.11 billion, according to consensus estimates provided by the company.

Orders fell 2% to $8.05 billion for the group as a whole, and ABB said order intake in its robotics-and-discrete automation segment was hampered by a normalization in customers' ordering patterns and inventory adjustments in China.

Weakness in the short-cycle business, particularly in the robotics segment, could draw attention among investors, Citi analysts wrote in a note to clients.

The company raised its full-year guidance, forecasting comparable revenue growth in the low teens percentage range and an operational earnings before interest, taxes and amortization margin of between 16.5% and 17.0%. It had previously expected comparable revenue growth of at least 10% and a margin above 16%.

However, consensus expectations were already projecting organic revenue of 14% and an operational Ebita margin of 16.8%, Berenberg analysts Philip Buller and Philip Modu said in a note.

Write to Adria Calatayud at adria.calatayud@dowjones.com

(END) Dow Jones Newswires

October 18, 2023 04:17 ET (08:17 GMT)

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