By John Revill ZURICH, April 22 (Reuters) - ABB on Wednesday said demand had remained resilient despite uncertainties triggered by the Middle East conflict, as the Swiss engineering company raised its
ABB shares surge as data centre business boosts outlook
By John Revill
ABB’s Upgraded Forecast and Market Reaction
ZURICH, April 22 (Reuters) - ABB shares hit an all-time high on Wednesday after the Swiss engineering group raised its full-year sales and profit forecasts, boosted by surging demand from data centres.
Investors welcomed the guidance upgrade and first-quarter earnings that beat expectations, pushing the shares up nearly 6% in early trading.
Growth Drivers for ABB
ABB said strong growth from data centres and other parts of its electrification business had offset heightened uncertainties linked to the Iran war.
Investment in Infrastructure
The group is also benefiting from heavy investment by utilities improving power grids, as well as electrical upgrades for land transport and automation at port terminals and cruise ships - trends it said should continue.
Revised Sales and Profit Projections
ABB now expects 2026 sales to rise by a high single-digit to low double-digit percentage, up from its previous forecast for comparable revenue growth of 6% to 9%.
It also expects its operational earnings before interest, tax, depreciation and amortisation (EBITA) margin to improve, versus previous guidance for a slight improvement.
Market Environment and Economic Outlook
Caution on Global Growth
CAUTION ON GLOBAL GROWTH
The upbeat outlook, underpinned by a record quarterly order intake, contrasts with growing caution over the global economy. The International Monetary Fund recently cut its growth forecast, citing soaring energy prices linked to the Iran war.
CEO Insights
CEO Morten Wierod said ABB raised its outlook after demand remained robust at the start of the year, with no material impact from the war.
"It's based on our order backlog, plus discussions we have with our partners and customers around the world," he added.
Future Demand Trends
Wierod said demand for automation and electrification products should accelerate as energy use rises and companies pursue efficiency gains, while data centre demand linked to artificial intelligence would continue to grow rapidly.
Financial Performance Highlights
First Quarter Results
In the first quarter, ABB said sales rose 18% to $8.73 billion, beating forecasts of $8.43 billion. Operational EBITA climbed to $2.05 billion, above expectations of $1.96 billion, supported by higher margins.
Order Intake and Analyst Commentary
Analysts also pointed to a sharp rise in orders, up 32% to $11.29 billion.
"The strength in order intake will be seen as the key positive, with not only data centre orders up 'triple digit' percentage, but strength across the board with record order levels in both Electrification and Motion," Citi analysts said.
(Reporting by John Revill. Editing by Tomasz Janowski and Mark Potter)
