Second quarter profit heartens ABB

The struggling Swiss-Swedish engineering giant ABB on Thursday reported a 41.5% increase in its second quarter net profit to 126 million dollars (104 million euros).

Net revenue reached 5.72 billion dollars, a rise of 10% over the same quarter last year, ABB said in a statement.

ABB, which has been emerging from several years of financial trouble, had issued a profit warning last month and announced 1,300 lay-offs, although it expected “a clear increase” in its full-year figures.

The group’s chief executive and president Fred Kindle said ABB had taken “sizeable” provisions in the second quarter to improve profits and cover litigation and regulatory costs.

“We had another strong operational performance, building on the momentum we saw at the beginning of the year,” he added.

Demand continued to grow in most areas except Asia during the second quarter and overall orders rose 8% to 6.14 billion dollars compared to the same period in 2004.

However, orders slackened 9% to 1.45 billion dollars in Asia, largely due to a large batch of power transmission orders in China which had bolstered its order book in the second quarter of 2004, ABB said.

ABB said its revenue growth targets for 2005 remained unchanged. The group is planning to release new performance targets for 2006 to 2009 on September 6.

ABB made a 199 million dollar profit in the first quarter.

The group recorded a loss of 35 million dollars for 2004 after making a further 234 million dollar payout for asbestos poisoning claims in the United States.