ABB posts record quarterly orders helped by data centre boom
The logo of ABB is pictured at the Global Industrie exhibition in Villepinte near Paris, France, March 26, 2024. REUTERS/Benoit Tessier
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ZURICH, Oct 20 : ABB said on Tuesday a boom in spending on data centres used to power artificial intelligence helped push its quarterly orders to a record, as the Swiss engineering group announced a $495 million investment to expand in Asia.
Orders surged 40 per cent to $12 billion in the three months ended September 30.
Much of the new business was driven by strong demand for products such as power distribution and cooling systems used in data centres, where orders more than doubled.
A surge in spending on AI and data centres is propping up the global economy, helping it withstand the energy shock from the Middle East war, the IMF said last week, although it warned that a reassessment of efficiency gains from adopting the technology could dent investment.
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The increase in orders meant ABB could tweak its full-year guidance higher, saying it now expected comparable sales growth in the “low teens” percentage range, up from its previous forecast of low double-digit to low teens percentage growth.
For its third quarter, ABB said its revenue rose 14 per cent to $9.70 billion, slightly below analysts’ forecasts of $9.74 billion in a company-gathered consensus.
Operational earnings before interest, tax and amortisation jumped 24 per cent to $2.03 billion in the three months to the end of September, slightly ahead of analyst forecasts for $2.0 billion.
Also on Tuesday, ABB said it was spending $495 million to take a 51 per cent stake in a low-voltage power distribution joint venture with Mitsubishi Electric, whose products are used in data centres and other industries.
“This deal will make us the low voltage market leader in Japan, one of the world’s largest electrification markets, allowing us to benefit from the broad electric power trends including any local data centre build-out,” said ABB CEO Morten Wierod.
“It also opens doors to the Asia-Pacific region,” he added.
Source: Reuters
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