ABB, the Swiss technology company, is scheduled to release its financial results for the fourth quarter and full year on Thursday. Here are the key details you need to know.
Analysts anticipate that ABB will report revenue of $8.10 billion for the fourth quarter, compared to $7.82 billion in the same period last year. The consensus estimates, compiled from 22 analysts, also project a yearly revenue of $32.10 billion, up from $29.45 billion in 2022.
Net Profit Forecast
According to company-provided consensus estimates, analysts predict a quarterly net profit of $872 million, a decrease from $1.13 billion in the previous year. However, for the full year, they expect a net profit of $3.7 billion, up from $2.475 billion in 2022.
Operational EBITA Forecast
The operational earnings before interest, taxes, and amortization (EBITA) for ABB are forecasted to be $1.35 billion for the last quarter of 2023. This is an increase from $1.15 billion in the same period last year. Additionally, the consensus estimates compiled by the company project a full-year operational EBITA of $5.44 billion, up from $4.51 billion.
Over the past year, shares in ABB have risen by nearly 17%. Since the release of the third-quarter results on Oct. 18, the shares have increased by approximately 14%. It is worth noting that the third-quarter update fell below consensus expectations, resulting in a significant decline in shares. However, the stock has since recovered.
What to Watch
ABB’s Growth Outlook and Competitiveness
Despite anticipating a stronger growth outlook, ABB has historically trailed behind its sector competitors, according to J.P. Morgan analysts. The company’s more limited portfolio in divisions such as building and software puts it at a disadvantage in areas where higher growth trends are expected.
In the electricals space, ABB faces increasing competitiveness, as noted by J.P. Morgan. However, the European industrials sector might experience slower sales growth in the fourth quarter in Europe and North America, particularly impacting industries like autos and machinery, according to UBS analysts. On the other hand, Asia appears to be witnessing acceleration trends in late 2023, particularly in sectors like autos, general industrials, electronics, and aerospace. However, UBS also mentioned that energy and construction sectors still show signs of moderation.
Looking ahead, investors will closely observe ABB’s outlook for 2024. The company recently raised its long-term financial targets, prioritizing growth. J.P. Morgan analysts expressed their confidence in ABB’s ability to achieve sustainably stronger organic growth in the coming years compared to its historical performance.