Investing.com -- ABB’s (ST:ABB) stock jumped over 2% on Thursday after it reported a solid 22% increase in net profit for Q1 2025, fueled by strong order growth, improved margins, and strategic portfolio moves, including the planned spin-off of its Robotics division by mid-2026.
Despite rising global uncertainties, particularly related to trade tariffs, the company reaffirmed its full-year guidance, signaling confidence in its outlook.
Chief executive Morten Wierod in a statement said, “ABB had a strong start to the year with progress across most areas. We confirm our 2025 outlook, though acknowledge growing global uncertainty.”
ABB’s net income grew to $1.1 billion, up from $905 million last year, with EPS rising to $0.60 from $0.49.
Operational EBITA surged by 13% to $1.6 billion, and the margin expanded to 20.2% from 17.9%.
Revenue reached $7.9 billion, a modest 1% increase year-on-year, although 3% below consensus due to some headwinds. The company’s organic revenue growth was 3%, slightly below the expected 5.2%.
Orders came in at $9.2 billion, up 3% year-on-year (5% on a comparable basis), and the order backlog stood at $23 billion, with a solid book-to-bill ratio of 1.16. Free cash flow was $652 million, reflecting an 18% increase from last year.
Americas saw the strongest growth with an 11% increase in orders, driven by a 9% rise in the U.S.. Asia, Middle East & Africa posted 4% growth, driven by a 13% jump in China, while Europe’s orders were flat, affected by currency fluctuations.
Citi flagged ABB’s strategic actions, including the Robotics spin-off and the strong momentum in data centres, which should continue to drive growth.
Citi analysts noted that ABB’s local-for-local model offers protection from tariff risks, particularly in the U.S., where 75-80% of content is local, ensuring minimal exposure to tariffs on imports from Asia.
Citi’s view is that the company’s mid-single-digit revenue growth guidance and stable margin expectations for Q2 2025 align with consensus estimates, reinforcing a positive outlook.
ABB (ST:ABB) launched a $1.5 billion share buyback program in February, repurchasing $216 million worth of shares in Q1.
The company’s dividend of CHF 0.90 per share was approved at the Annual General Meeting in March, emphasizing its commitment to returning capital to shareholders.
For the remainder of 2025, ABB reaffirmed its full-year guidance, expecting mid-single-digit revenue growth and adjusted EBITA margins greater than 18%.
For Q2 2025, the company anticipates organic revenue growth in the mid-single digits and stable margins, consistent with consensus expectations.