Shares of robotics manufacturers ABB (NYSE:ABB) and Rockwell Automation (NYSE:ROK) both jumped Tuesday following so-so earnings reports during a trading session that was anything but decidedly bullish. Rockwell topped its sales and earnings estimates for the three-month stretch ending in March, but the bar was set low. Unlike ABB, Rockwell Automation managed to grow its top and bottom lines, yet each company cautioned investors that coronavirus-related shutdowns were already taking a financial toll on the quarter currently underway. The stocks rallied anyway.

That bullish interest may be rooted in an idea that's much bigger than last quarter or the present quarter, however.

While the sheer disruption caused by the coronavirus is making it difficult to "do" any sort of business, and the prospect of a recession is forcing some organizations to rethink spending plans, the COVID-19 contagion has exposed a weak link in the world's commerce engine -- people. If people can't or won't work, things don't get done. Robots, however, don't get sick.

Man with a laptop programming a robotic arm.

Image source: Getty Images.

What the robotics makers said

For its second fiscal quarter ending in March, U.S.-based Rockwell turned $1.68 billion worth of revenue into operating earnings of $2.43 per share. That was better than the $2.04 per share earned in the same quarter a year earlier when the company generated $1.66 billion worth of business. But, organic sales were flat, and Rockwell warned its shareholders that organic revenue looked as if it was going to slump between 6.5% and 9.5% this year.

Swiss automation company ABB fared worse in its first quarter of the year, with revenue of $6.21 billion sliding 9% lower compared to the year-earlier comparison of $6.85 billion. Operating earnings before interest, taxes, depreciation, and amortization (EBITDA) slipped 17% to $636 million, coinciding with a comparable decrease in profit margins.

The company didn't offer detailed full-year guidance, but CEO Bjorn Rosengren did comment, "In the second quarter, we expect ABB's operations to be significantly challenged by a sharp drop in demand due to lockdowns in many parts of the world."

So why the big advances for each? Most plausibly because investors know where the present global situation is leading.

Speeding up workforce changes

GlobalData analyst Wafaa Hassan was the latest to chime in on the matter, commenting on Tuesday, "Robots have been replacing humans in certain jobs for some time, but the COVID-19 crisis is accelerating the process."

Hassan was responding to reports that robotics company Brain Corp. had secured new funding that will primarily go to expanding the use of its robots to scrub floors for companies that have been under shutdown orders for weeks now. Other floors have gotten use, like stores operated by in Walmart and Kroger, both of which already use Brain's cleaning robots. Walmart is buying another 1,500 robots in response to the COVID-19 contagion and the expanded need for cleanliness.

It was Hassan's broader assessment that points to the changing underpinnings of the industry's forward progress. He adds, "The COVID-19 crisis will ultimately increase the use of robotics across all industries."

He's not alone in his expectation. While almost all companies will have to fight to work past the temporary financial roadblock put in place by the coronavirus, manufacturing sites, processing plants, and other industrial companies don't want to be trapped in the same situation again. International Data Corporation's (IDC's) Jordan Speer wrote for IndustryWeek late last month that more than 70% of the companies participating in IDC's 2020 Supply Chain Survey said robotics will be important, or very important, to their organization within the next three years. Market research company Fact.MR now believes the robotic process automation market is poised to grow at a compound annual growth rate of 33% through 2029 due to the adverse impact of COVID-19.

Well-suited to capitalize on a trend

Rockwell Automation and ABB certainly aren't the only automation names that stand to benefit from the displacement of millions of workers. Fellow Fool Lee Samaha named 10 robotics stocks last year that may catch a nice tailwind as we move into the new normal of a post-coronavirus world.

Rockwell and ABB may be the easiest to own, however, due to their bigger size and more straightforward product lines. ABB makes total control systems for materials companies, auto manufacturers, paper companies, and food processors -- just to name a few -- all hit hard by shutdowns. Rockwell makes servos, computerized motion-control systems, and the sensors that make them all work together properly, plus more.

Of the two, Rockwell Automation appears to be the lower-stress pick right now. Not only is it seemingly faring better than ABB in what's turned into a very uncertain environment, but there's also better visibility. While Rockwell knows revenue is apt to dip this year, at least it's been willing to suggest how much that's going to happen. And, analysts still expect a resumption of solid growth after this year.

History and projection of Rockwell Automation's revenue and per-share earnings.

Data source: Thomson Reuters/Refinitiv. Chart by author/

More than anything though, these are both names well suited to capitalize on a bigger theme -- robotics -- than a short-term cultural or societal tide. As an example, a biopharma company that comes up with a treatment for the coronavirus may do very well for a quarter or two, but there's no thrilling follow-up. The aforementioned IDC, conversely, believed earlier this year that the global robotics and drone market was poised to swell from $129 billion this year to $241 billion by 2023. The COVID-19 contagion likely dampened that expectation in the meantime, but Fact.MR's decade-long, double-digit growth expectation suggests the industry will push past what's only going to be a temporary headwind.