ABB Reports Surge in Q2 Net Profit Despite Decline in New Orders
ABB reports a surge in net profit for Q2 despite a decline in new orders, with revenue growth and efficient backlog execution. Future outlook includes low double-digit revenue growth for Q3 and plans for comparable revenue growth in 2023.
Troy D. Hanson
August 14, 2023
By Pierre Bertrand
ABB, the Swiss industrial company, announced impressive financial results for the second quarter of the year, with a significant increase in net profit despite a decline in new orders. The company reported that net income more than doubled to $906 million compared to $379 million in the previous year. This growth was driven by a 13% increase in revenue, reaching $8.16 billion.
Although orders for the three-month period fell by 2% to $8.67 billion, ABB attributed this to a softening compared to the high order levels of the previous year. Despite this, the company stated that revenue growth was supported by efficient execution of its backlog. Additionally, ABB's earnings were positively influenced by favorable pricing, which effectively offset inflationary effects.
Operational earnings before interest, taxes, and amortization (Ebita) saw a significant rise of 25% compared to the previous year, reaching $1.42 billion.
Looking ahead to the third quarter, ABB anticipates low double-digit comparable revenue growth and expects its operational Ebita margin to be slightly higher than the 16.6% achieved during the same period last year. Moreover, ABB has set its sights on achieving comparable revenue growth of at least 10% for the year 2023, with an operational Ebita margin surpassing 16%.