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ABB's Electrification Segment Gains Momentum: Will This Continue?
ZACKS· 2025-07-31 16:11
Core Insights - ABB Ltd (ABBNY) is experiencing strong performance in its Electrification segment, driven by robust customer activities in key markets such as service and utilities, with orders in Q2 2025 reaching $4.52 billion, a 9% year-over-year increase on a comparable basis [1][8] - The order backlog has reached a record $8.69 billion, up from $7.55 billion in the same quarter last year, with revenues for the segment totaling $4.33 billion, reflecting an 11% year-over-year increase [2][8] - The Electrification segment benefits from effective execution of its order backlog, particularly in medium voltage and power protection, with positive customer activity and project wins expected to enhance growth [3][8] - ABBNY anticipates a favorable market response to its new SACE Emax 3 air circuit breaker, which is designed to enhance energy security in critical infrastructure [4][8] Peer Segment Performance - EnerSys' Energy Systems segment reported net sales of $399 million in Q4 fiscal 2025, an 8% year-over-year increase, driven by data center strength and recovery in the U.S. Communications market [5] - Emerson Electric Co.'s Software and Control Automation Solutions segment generated net sales of $1.42 billion in Q2 fiscal 2025, up 7% year-over-year, supported by momentum in the AspenTech business and strength in power and process markets [6] Financial Performance and Valuation - ABB shares have increased by 22% over the past six months, outperforming the industry growth of 16.4% [7] - The company is currently trading at a forward price-to-earnings ratio of 25.07X, above the industry average of 24.53X, and carries a Value Score of C [9] - The Zacks Consensus Estimate for ABB's 2025 earnings has risen by 1.2% over the past 60 days [12]
ABB's Electrification Segment Gains Pace: More Upside to Come?
ZACKS· 2025-07-11 16:26
Core Insights - ABB Ltd's Electrification segment is a key driver of overall growth, with strong customer activities in major markets such as utilities and buildings [1][3] - The segment's orders in Q1 2025 totaled $4.39 billion, reflecting a 2% year-over-year increase, while the order backlog reached a record $8.17 billion [1][7] - Revenue for the Electrification segment grew by 6% year-over-year during the same period [1][7] Segment Performance - The Electrification segment benefits from effective execution of its order backlog, particularly in medium voltage and power protection businesses [2] - Increased project wins and improving customer activity in short-cycle businesses are positive indicators for future performance [2] - The acquisition of Siemens' Wiring Accessories is expected to further support revenue growth in upcoming quarters [2] Market Challenges - There are concerns regarding muted customer demand in the hyperscale data center market and weakness in the residential building market in China [3] - Global trade policy uncertainties may impact the segment's near-term performance [3] - Despite these challenges, ongoing electrification trends and a strong order backlog position the segment for continued growth [3] Peer Comparison - Eaton Corporation's Electrical Americas segment reported net sales of $3.01 billion in Q1 2025, up 11.9% year-over-year, with a 6% increase in backlog [4] - EnerSys' Energy Systems segment generated net sales of $399 million in Q4 fiscal 2025, reflecting an 8% year-over-year increase, driven by data center growth [5] Valuation and Estimates - ABB shares have gained 13% over the past six months, outperforming the industry growth of 6.5% [6] - The company is trading at a forward price-to-earnings ratio of 23.61X, slightly above the industry average of 23.13X [9] - The Zacks Consensus Estimate for ABB's second-quarter 2025 earnings has declined over the past 60 days [10]