By Scott Kanowsky
Investing.com -- Shares in ABB Ltd (SIX:ABBN) edged higher on Thursday after the Swiss robotics company reported a jump in second-quarter orders despite facing supply chain constraints linked to strict COVID lockdowns in China.
The Zurich-based group's order intake came in at $8.8 billion during the period, rising by 20% when stripping away the effect of currencies and business changes, while order backlogs during the quarter also reached a record high of $19.5 billion. The company said the increase was due to solid demand in all business areas that helped offset negative exchange rate effects.
ABB flagged that component shortages stemming from health restrictions in China weighed on customer deliveries, particularly in the company's automation and distribution solutions units. However, ABB said the supply chain crunch was not as harsh as it was in the previous quarter.
"We anticipate further easing of component supply in the coming quarters," said ABB chief executive officer Björn Rosengren in a statement.
He added that ABB expects to see double-digit comparable revenue growth in the third quarter, along with steady core profit margin improvement over the rest of the year. The company is targeting a margin of at least 15% by 2023, supported in part by a strong order backlog and positive market momentum.
Net income dropped by 50% to $379 million, missing analyst estimates for $467 million, as the company took a hit from charges related to the exiting of older businesses and a move to ditch its Russian operations in the wake of the Kremlin's invasion of Ukraine.
Revenue also fell by 3% due to foreign exchange effects that outweighed increased volumes and pricing. On a comparable basis, sales rose by 6%.