Summary:
- ABB experienced a record high quarterly order intake in Q2, with a 14% increase year-on-year, surpassing revenue growth.
- The surge in orders was driven by the United States, now ABB’s largest market, with a 37% increase in orders due to the demand for automation, electrification, and data center expansion.
- ABB’s revenue rose by 8% to $8.90 billion in the three months to June, with core operating income climbing by 9% to $1.71 billion, leading to a 7% increase in share value.
In the second quarter of the year, ABB experienced a significant boost in its order intake, marking its highest quarterly record to date. The company saw a remarkable 14% increase in orders compared to the previous year, outpacing its strong revenue growth. This surge in orders was largely fueled by the United States, which has now become ABB’s biggest market. Orders from the US skyrocketed by 37%, driven by the urgent need to expand automation, electrification, and data center capacity in the country.
According to Chief Executive Morten Wierod, the rising demand for electricity is a key factor behind this surge in orders. He stated, "Demand for electricity is going up quickly. That is being used by data centers, but also a lot of other industries are increasing their electricity consumption." This growing demand for electricity has propelled ABB’s revenues, which rose by 8% to $8.90 billion in the second quarter, surpassing analyst expectations. Additionally, the company’s core operating income (EBITA) climbed by 9% to $1.71 billion, with net profit reaching $1.15 billion, exceeding consensus estimates and leading to a 7% increase in the company’s shares.
Despite concerns over potential tariffs imposed by the US government, ABB remains confident in its business operations in the country. Approximately 80% of the products ABB sells in the US are manufactured locally, providing a buffer against any tariff threats. Wierod emphasized, "There is no point pre-buying because we will not be hit by tariffs." This assurance has been particularly beneficial for the data center sector in the US, where ABB witnessed a significant increase in equipment orders ranging from 10% to 20% during the quarter.
With around half of ABB’s data center business located in the US and the remaining spread across Asia, Africa, the Middle East, and Europe, the company anticipates a steady geographical mix as demand continues to rise. This strategic positioning, coupled with the company’s strong financial performance in Q2, is poised to drive ABB’s growth and success in the evolving market landscape.
