Swiss tech giant, ABB Ltd., reported a significant increase in its third-quarter net income, which rose by 145% to $882 million, up from $360 million the previous year. The company's basic earnings per share also saw a substantial rise of 149% to $0.48 from last year's $0.19. Operational EBITA experienced a growth of 13%, amounting to $1.39 billion, while revenues rose by 8% to reach $7.97 billion, compared to last year's $7.41 billion.
The surge in profit was driven by pricing adjustments, order backlog conversion, and a nonoperational provision tied to the Kusile power-station project in South Africa. Despite this success, ABB reported a 2% year-on-year order decline to $8.05 billion due to changes in customer ordering patterns and inventory adjustments in China affecting the robotics-and-discrete automation segment.
Following these results, ABB's shares tumbled 5.6% in Zurich. The company missed analyst expectations of a net profit of $919 million and revenue of $8.11 billion. The decline in orders was identified as a potential red flag for investors by analysts at Citi.
Looking towards the fourth quarter, ABB anticipates low to mid single-digit comparable revenue growth and an operational EBITA margin around 16%. The firm updated its annual guidance for 2023, now expecting low teens growth in comparable revenue and an operational EBITA margin of 16.5% to 17%, surpassing prior projections of at least 10% revenue growth and an operational EBITA margin above 16%. However, Berenberg analysts noted that consensus expectations had already factored in these projections.
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