(Bloomberg) -- ABB Ltd. shares dropped after reporting a decline in orders across regions as weaker demand for its automation products offset gains in its power-grid business.
Overall, ABB’s orders fell 3% in the three months through June, including an 11% drop in China and 6% slide in the Americas, the Swiss company said Thursday.
“China continues to be negative overall, though we saw a stronger part in the electrification business also in China,” Chief Executive Officer Björn Rosengren said in a Bloomberg TV interview. He said he’s confident in a recovery in China, which accounts for roughly 15% of ABB’s revenues.
Trading in ABB shares was halted after the stock fell 6.6% at market open. When it reopened, shares were about 6% down.
ABB and other industrial producers have been grappling with weaker demand in China, where inflation and rising interest rates have weighed on spending. ABB, however, said in April that it had begun to see signs of recovery there, boosting its shares, which have risen more than 30% this year.
The company has been weighing a sale of some of its electric mobility assets, which includes electric-vehicle charging stations worldwide as well as research and development facilities in China.
Still, the Swiss industrial supplier posted a record 19% margin in the second quarter helped by strong demand from data centers, higher volumes and better pricing. ABB still sees its margin at around 18% for the year.
Massive investments in data centers, driven by growth in artificial intelligence, have been a bright point for ABB, which produces transformers that enable power grids to feed the centers’ substantial energy needs.
ABB expects the segment to grow more than 10% annually.
Morten Wierod is poised to take over as the new chief executive officer on Aug. 1, replacing Björn Rosengren, who has led the industrial giant through an overhaul including divestments to streamline operations and lift profit.
(Updates with shares beginning in first paragraph.)
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