ABB shares slide as income miss overshadows Mitsubishi deal

(AWP Alliance News) - ABB Ltd on Tuesday posted a "record order intake" in the third quarter, but shares dropped as it missed consensus on net income.

Shares in the Zurich-based company fell 5.7% to CHF70.44 in morning trading.

ABB said third-quarter orders rose 40% to USD12.06 billion from USD8.61 billion a year earlier, driven by growth in the electrification and motion businesses, while automation remained stable. The data centre segment was particularly strong, recording a triple-digit increase.

However, Joachim Klement from Panmure Liberum said the results were overall "not very exciting".

Revenue grew 14% to USD9.70 billion from USD8.49 billion, roughly in line with consensus. Net income fell 2.2% to USD1.18 billion from USD1.21 billion, missing consensus by 17%, which "shows that non-operating costs have been high and need to be tackled," Klement added.

Basic earnings per share fell 1.5% to USD0.65 from USD0.66 a year earlier.

Looking ahead, ABB said it expects fourth-quarter revenue growth broadly similar to the third, and for 2026, it expects a positive book-to-bill and revenue growth in the "low teens" range compared to the previous year.

Chief Executive Officer of ABB Morten Wierod said: "ABB delivered record order intake, and improved operational performance with strong cash flow and return on capital. We advanced our leading position in direct current technology and today we progressed on mergers & acquisitions with a new electrification joint venture with Mitsubishi Electric."

Separately, ABB said it will acquire a 51% stake in Mitsubishi Electric's low-voltage power distribution business for a total consideration of JPY79.00 billion, around USD495.0 million. ABB will also gain full ownership of Mitsubishi Electric's related sales operations outside Japan and retain an option for full ownership in the mid-term.

For the 12 months ended March 2026, Mitsubishi Electric's low-voltage power distribution business recorded net sales of around JPY102.00 billion.

Wierod said the deal, which is expected to close in the second half of 2027, will make ABB "the low voltage market leader in Japan, one of the world's largest electrification markets, allowing [ABB] to benefit from the broad electric power trends including any local data centre build-out. It also opens doors to the Asia-Pacific region."

Mitsubishi Electric shares closed 2.0% down at JPY4,852.00 in Tokyo on Tuesday.

By Camilla Borri, Alliance News reporter

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