By Nina Kienle

ABB posted a second-quarter net profit increase that beat market expectations as it continues to capitalize on booming demand from artificial intelligence and data-center infrastructure.

The Swiss industrial-technology company on Thursday kicked off earnings season for the European industrial sector with increased margins in both its electrification unit and its process-automation business, which provides integrated technologies for industrial operations to measure, control, and optimize their systems. Its Motion unit, which supplies motors and drives, remained virtually stable, it said.

This combined operational improvement offset the year-on-year headwind from margin pressure in its robotics division, ABB said.

The company had previously announced plans to spin off the robotics arm, with the carve-out for a distribution as a dividend-in-kind during the second quarter of 2026 progressing as planned, it said.

Orders in the electrification segment, which sells technologies to distribute and manage electric power across buildings and infrastructure, rose 9% on year to $4.52 billion on a comparable basis after having accelerated over the past two years. Operational earnings before interest, taxes, and amortization surpassed the $1 billion mark for the first time, increasing by 16% to $1.03 billion, the company said.

"It was particularly encouraging to see that the positive development was broad-based across all four business areas, a majority of customer segments, all three geographical regions and in both the short-cycle and project-related businesses," Chief Executive Morten Wierod said, adding that this signals a robust general trading environment.

For the quarter ended June, the maker of factory robots and electric motors posted net profit of $1.15 billion, up from $1.10 billion the prior year. Revenue rose 8% to $8.90 billion.

The figures beat analysts' expectations of net profit at $1.12 billion on revenue of $8.72 billion, according to consensus estimates compiled by the company.

Earnings before interest, taxes, and amortization margin came in at 19.2%, compared to 19% a year ago.

Operational Ebita rose 9% to $1.71 billion.

While the print beat market views, expectations were low enough that results were unlikely to disappoint, Morgan Stanley analysts previously said in a note to clients.

However, the results provide a solid readacross for data center-exposed names like Siemens, Schneider, Legrand and Prysmian, JPMorgan analysts said.

For the third quarter, ABB anticipates comparable revenue growth to be at least in the mid-single digit range and the operational Ebita margin to remain broadly stable year-on-year.

For 2025, ABB backed its guidance, also targeting comparable revenue growth to be at least in the mid-single digit range and the operational Ebita margin to improve year-on-year.

Vontobel analyst Mark Diethelm also notes the confirmed guidance with an encouraging third-quarter outlook. This should result in higher full-year consensus margin assumptions, supporting the shares, he said.

Shares trade 6.5% higher at 50.48 Swiss francs.

U.S. peer Eaton is scheduled to report second-quarter earnings on July 30. French peers Legrand and Schneider Electric are expected to publish results for the first six months of 2025 on July 31.

Write to Nina Kienle at nina.kienle@wsj.com

(END) Dow Jones Newswires

July 17, 2025 05:24 ET (09:24 GMT)

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