ABB shares dropped as a broad-based retreat among stocks tied to artificial intelligence eclipsed third-quarter results from the Swiss engineering group that showed data-center demand boosted orders.
Shares in ABB were down 5.5% in European morning trade Tuesday, reducing the stock's year-to-date gain to 19%. European industrial peers Siemens and Schneider Electric slid 4.1% and 2.8%, respectively, while cable makers Prysmian and Nexans were also down.
Chip stocks in Asia and Europe resumed their declines after Monday's recovery faltered, and the falls spread to shares in other companies in the semiconductor supply chain and other sectors exposed to data centers. Investor concerns about rising borrowing costs have sparked a selloff among AI-related stocks in recent days.
ABB executives said during a call with analysts Tuesday that the company's data-center operations were standout performers during the third quarter, with orders more than doubling and no sign of a slowdown.
Overall, ABB's orders jumped 40% on a comparable basis in the third quarter to $12.055 billion.
The company nudged up its annual guidance for the third time this year. It now anticipates full-year comparable revenue growth in the low-teens percentage range, against previous expectations of an increase ranging from a low double-digit to a low-teens figure.
ABB forecast this year's operational earnings before interest, taxes and amortization margin--one of the company's preferred profitability measures--to improve by at least 270 basis points. For 2025, it reported the figure at 19%.
Quarterly net profit fell to $1.18 billion from $1.21 billion in the year-earlier period, ABB said. Operational Ebita climbed 24% to $2.03 billion, with a margin that expanded to 20.8% from 19.2%.
Analysts had forecast ABB's net profit at $1.42 billion and operational Ebita at $2 billion, according to consensus estimates compiled by the company.
Revenue stood at $9.7 billion, up 14% on a comparable basis, against consensus estimates of $9.74 billion.
ABB also said it is investing roughly $495 million to buy a controlling stake in the newly carved out low-voltage-power distribution business of Japan's Mitsubishi Electric.
The two companies are forming a joint venture, with an option for ABB to take full ownership over the medium term. The Swiss company said the deal aims to strengthen its position in Japan and allow it to expand into growth markets in Asia-Pacific.
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