ABB Q2 Results and Rotork Acquisition
ABB Ltd announced that its second‑quarter 2026 operating profit exceeded expectations, reporting revenue of $9.48 billion, a 14% increase year‑on‑year (12% on a comparable basis) and essentially in line with the consensus estimate of $9.47 billion. Orders rose to $12.04 billion, up 30% in U.S. dollar terms and 28% on a comparable basis. Operational EBITA climbed 20% to $1.93 billion, lifting the margin to 20.2% from 19.3% a year earlier, surpassing the analyst average estimate of $1.88 billion and a margin expectation of 19.9%. Net income attributable to ABB increased 7% to $1.23 billion, falling short of the consensus estimate of $1.32 billion. Basic earnings per share grew 8% to $0.68, below the expected $0.73. Free cash flow rose 4% to $881 million, while cash flow from operating activities increased 9% to $1.15 billion.
The company also disclosed an all‑cash acquisition of Rotork plc for an enterprise value of approximately $5.5 billion. Rotork shareholders will receive 503 pence per share, representing a ~60% premium to Rotork’s latest three‑month average share price. The Rotork board unanimously recommended the offer. The transaction is being executed as a court‑sanctioned scheme of arrangement under the U.K. Companies Act 2006 and is expected to close in the first half of 2027, subject to a shareholder vote and regulatory approvals.
Financing for the acquisition will come from ABB’s existing cash resources of roughly $5.8 billion in cash and marketable securities as of 30 June 2026, together with committed bank facilities. Additionally, ABB plans to redeploy about $4.8 billion in net cash proceeds from the divestment of its Robotics business to SoftBank, a transaction anticipated to close in the second half of 2026.
Management indicated that Rotork, a maker of electric actuators and intelligent flow‑control solutions, is expected to add approximately 3% to ABB’s revenues and be immediately accretive to the operational EBITA margin. Rotork reported 2025 revenues of around $1 billion and an adjusted operating profit margin of 24.6%.
CEO Morten Wierod stated that the quarter “reflects the strength of ABB’s performance and position at the core of electrification and automation megatrends” and that the Rotork acquisition will “create further value by expanding our automation portfolio.”
Looking ahead, ABB forecast low‑to‑mid‑teens comparable revenue growth in Q3 2026, with the operational EBITA margin improving sequentially from the second quarter. For the full fiscal year 2026, the company expects a positive book‑to‑bill ratio and low double‑digit to low‑teens comparable revenue growth, with the operational EBITA margin improving year‑on‑year, even when excluding a real‑estate gain recorded in Q1 2026.