Swiss engineering conglomerate ABB, Ltd. (NYSE: ABB – $25.49) reported an increase in third-quarter profit as revenue increased 6%. Net profit was $571 million, up from $568 million a year earlier and equal to an adjusted $0.34 per share, three cents better than consensus views. Revenue grew to $8.72 billion, up from $8.26 billion a year earlier, but somewhat shy of Street expectations. Total orders were 8% higher on the year, driven largely by strong demand in Europe and the Americas, which compensated for a slight decrease in orders from China. Total services and software orders rose 12% and were 18% of total orders, compared to 17% a year ago.
The Electrification Products and Robotics and Motion divisions improved margins sequentially, and Industrial Automation and Power Grids delivered solid operational performance in the quarter, according to the company’s report on the results. The integration of its B&R acquisition is progressing well and, with the recently announced acquisition of GE Industrial Solutions, ABB is firming up their number 2 position globally in electrification.
ABB is also accelerating its push into robotics and plans to double robot production capacity in China as part of a bid to become the biggest provider of industrial automation equipment. It also intends to expand its fast-growing electric vehicle charging infrastructure business in China, as it is one of the few companies that has the manufacturing capacity to handle the rapid pace of China’s transition to electric vehicles. Separately, ABB won a $130 million order to provide power transmission infrastructure for the new Hinkley Point C power plant in the U.K. The high-quality shares, nearing its 52-week high and yielding 3%, can continue to be held for long-term growth and decent total returns.