Zurich (Reuters) - The ABB Group is raising its profit forecast following a rise in sales and profits in the first quarter.

The operating profit margin (Ebita) is now expected to rise to around 18 percent, the Swiss electrical engineering group announced on Thursday. Previously, a slightly improved margin compared to the previous year's figure of 16.9 percent was targeted. "With an order intake of nine billion dollars, this was one of the strongest quarters," said Group CEO Björn Rosengren. "This gives us the confidence to increase our margin expectations for 2024." As previously announced, sales are expected to increase by around five percent on a comparable basis in 2024.

In the first three months, turnover increased by 2% to 7.87 billion dollars compared to the same period last year. Ebita rose by eleven percent to 1.42 billion dollars, corresponding to a margin of 17.9 percent. The Siemens rival thus met its own targets and exceeded market expectations in terms of operating profit. In terms of turnover, it lagged behind analysts' forecasts. According to the company's own survey, they had expected an average sales revenue of 8.13 billion dollars and an EBITA margin of 16.8 percent. The bottom line was a 13 percent lower net profit of 905 million dollars, partly due to a higher tax rate.

Investors applauded. ABB shares rose 5.8 percent, putting them at the top of both the Swiss blue chips and European industrial stocks. "The margin increase was impressive and therefore the increase in the margin target was the logical consequence," explained Marco Estermann, analyst at Luzerner Kantonalbank.

ABB's new business in America went well, while in Europe a restrained development in Germany and Italy slowed things down. In China - the Group's second-largest market - order intake fell by 18 percent. "But the good thing about China is that we are experiencing a new dynamic," said ABB CEO Rosengren, who is stepping down at the end of July after five years at the helm. "Our operating units are signaling that the market is more active and that we should see better growth in China." Overall, the Asia, Middle East and Africa region showed stable development, also thanks to strong growth in India. Group-wide, ABB brought in 8.97 billion dollars in orders, four percent less than the record quarter of 2023 a year earlier.

(Report by Paul Arnold, edited by Myria Mildenberger. If you have any questions, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and the economy) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)