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ABB beats expectations despite profit slump

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11:20 CEST+02:00
Although profits reported by Swedish-Swiss engineering group ABB fell significantly in the second quarter, its results still exceeded consensus expectations.

On Thursday, ABB said its net profit slumped 31 percent to $675 million from $975 million during the same period last year.

While the figures still beat the Reuters net profit forecast of $592 million, ABB warned it was unclear when the market would improve.

"Visibility in ABB's markets for the second half of 2009 remains limited. Significant uncertainty remains surrounding the key demand drivers for the company's products and systems," the group said in a statement.

It noted that the need for new power infrastructure remained but "uncertainty surrounding economic recovery, the stability of raw material prices and the availability of project funding continue to influence the timing of many power investment decisions."

As a result, its orders declined 35 percent to $7.3 billion in the second quarter, with the lower demand most marked in industrial markets.

"The economic environment remains challenging, although there are growth opportunities driven by the need for more intelligence and automation in the power network, and the generation and integration of renewable energies," ABB chief executive Joe Hogan said.

"While we'll continue to focus on adjusting costs quickly, we also aim to take advantage of these opportunities to extend our market leadership."

ABB will maintain its stated goals for 2007-2011, the exception being the Robotics division, which according to the company “is experiencing an unprecedented market downturn and which requires addition restructuring.”

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