Zurich based ABB reported third quarter orders up 40 percent year on year to a record 12 billion dollars, driven by data centers and utilities in the United States. Orders from the Americas region rose about 70 percent, led by an 82 percent year over year increase from the United States. The electrification segment booked record orders of 7.67 billion dollars, up 70 percent, with electrification orders in the Americas up 117 percent, Europe up about 20 percent and China up almost 40 percent on a comparable basis. Revenue rose 14 percent to 9.7 billion dollars against 8.5 billion a year earlier, and the order intake yielded a book to bill ratio of 1.24.
ABB makes switchgear, circuit breakers, transfer switches and low voltage transformers, the equipment layer between generation and load. “Utilities continue to invest in refurbishment and build out of the electrical grid to secure power availability and efficiency,” the company said. Chief Financial Officer Christian Nilsson called data centers the standout customers of the quarter, with segment orders increasing by triple digits, adding: “But it’s not just data centers, of course. The general investment and build out of the grid really demonstrates strong growth.”
Net income was 1.9 billion dollars, down 2 percent, in part on 115 million dollars of non cash exchange hedging charges tied to the ongoing Rotork acquisition. Operational earnings before interest, tax and amortisation rose 24 percent to 2 billion dollars with the margin expanding 160 basis points to 20.8 percent, free cash flow was 1.6 billion dollars in the quarter and 3.7 billion year to date, and the company announced a joint venture taking a 51 percent share of Mitsubishi Electric’s carved out low voltage power distribution business. For commodity markets the read is direct: the electrical equipment order book that consumes copper and electrical steel is still growing at rates that support the strategic metals demand case made at LME Week.