ABB (ABBN): orders jump 40% to a record $12.1bn on data-centre demand, while profit per share slips 2%
ABB, the Swiss maker of electrical equipment, motors and robots, said new orders in the third quarter rose 40% to a record $12,055m, with orders from data centres up by a triple-digit percentage. Operating profit before one-off items rose 24%, but net profit fell 2% because of a non-cash currency charge linked to an acquisition.
What happened
On 20 October 2026 ABB published results for the three months to 30 September. Orders, the value of new contracts signed, reached $12,055m, against $8,606m a year earlier. Revenue, the value of work delivered and invoiced, rose to $9,701m from $8,491m. ABB said orders from data centres, the buildings that house the computers behind artificial intelligence and cloud services, grew by a triple-digit percentage. All figures are in US dollars and come from ABB's own release, which ABB states in dollars even though it is a Swiss company. Investing.com reported that the shares fell about 6% on the day; a German market report put the fall at 4.35% in early Frankfurt trading, so the exact move depends on the time of measurement.
ABB also announced it will buy a 51% controlling stake in a joint venture with Mitsubishi Electric's low-voltage power distribution business, which makes the switchgear and breakers that carry electricity safely around buildings. The total price is about 79bn yen, or about $495m, and the business is valued at about $890m including debt, according to the release. ABB has an option to take full ownership later. Investing.com adds that ABB bought back 5.73m of its own shares for about $565m in the quarter, under a programme of up to $2bn.
The numbers, explained
Start with the two measures of demand. Orders rose 40.1% (12,055 divided by 8,606 is 1.401). Revenue rose 14.2% (9,701 divided by 8,491). Because orders ran well ahead of revenue, the book-to-bill ratio, orders divided by revenue, was 1.24 (12,055 divided by 9,701). A figure above 1 means more work is being signed than delivered. Investing.com reports the order backlog, the contracts signed but not yet delivered, grew 35% to $32.26bn, a figure we found only in that source.
Next, profit. Operational EBITA is ABB's preferred measure: operating profit before the cost of acquisitions and one-off items. It rose 24.1% to $2,026m from $1,633m, and ABB reports its margin, the share of each sales dollar kept as that profit, at 20.8%, against 19.2%, a rise of 1.6 percentage points. (Dividing the rounded dollar figures gives 20.9%; we use ABB's reported 20.8%.) Income from operations, the broader measure after those costs, rose 15.2% to $1,846m from $1,602m. Net income attributable to ABB, the profit left for shareholders, fell 2.2% to $1,181m from $1,208m, and basic earnings per share, the profit per share, slipped to $0.65 from $0.66.
Why did profit fall when operating profit rose? Investing.com reports a non-cash charge of roughly $115m, and ABB's release says the cause is a revaluation of a currency hedge tied to its announced Rotork acquisition, booked in finance costs. It is an accounting entry, not cash leaving the company. Cash tells a steadier story: cash from operating activities rose 4.8% to $1,862m from $1,777m, and free cash flow, the cash left after investment in equipment and buildings, rose 1.5% to $1,576m from $1,552m. Over nine months, orders were up 33.8% to $35,395m and operational EBITA up 27.0% to $6,000m.
Why it matters
ABB makes money by selling and servicing the equipment that generates, distributes and uses electricity: electrical products, drives and motors for factories, automation software and robots. Data centres need large amounts of reliable power, so they buy switchgear (equipment that routes and protects power), transformers and drives. These results show that demand is arriving as signed orders, which become revenue over the following quarters. Investing.com reports that the electrification division's orders rose 70%, led by data centres.
For rivals and customers, the picture is of a tight market for electrical equipment: a 1.24 book-to-bill means ABB is taking in orders faster than it ships them. That is a fact about the order book, not a forecast. Our commentary: the 2% fall in net profit looks worse than the business, since the cause is a one-off accounting charge, while operating profit and cash flow both grew. Note also that gross margin, the share of sales left after the direct cost of making them, slipped to 40.6% from 41.2%, so the improvement came from lower overheads relative to sales, not from higher product margins.
What to watch next
ABB gave its own forecast, which is the company's view rather than ours. For the fourth quarter it expects comparable revenue growth (growth adjusted for currency and acquisitions) broadly similar to the third quarter, and a smaller seasonal fall in margin than usual, before a gain of about 240m Swiss francs from property sales. For the full year it expects a book-to-bill above 1, comparable revenue growth in the low teens, and a reported operational EBITA margin up by at least 2.7 percentage points. A German market report lists the fourth-quarter results for 28 January 2027 and first-quarter results for 20 April 2027. We have not seen those dates in ABB's own text.
- Book-to-bill: new orders divided by revenue; above 1 means the order book is growing
- Operational EBITA: operating profit before acquisition-related costs and one-off items
- Free cash flow: cash from operations after spending on equipment and buildings
Sources
More on ABB (ABBN) · Industrials takes
For information only. Not financial advice. See our disclaimer and editorial standards. Spotted an error? Tell us.
