ABB posts drop in profits

Swiss-Swedish engineering firm ABB on Thursday reported a drop of 25 percent in third quarter net profit while orders grew strongly, thanks in part to a increased demand for renewable energy.

ABB posts drop in profits

Net profit in the third quarter reached $774 million (€560.1 million), compared to a figure of $1.04 billion for the same period last year that was boosted by a $380 million adjustment for provisions, it said.

The result exceeded third quarter net profit of $634 million forecast by analysts polled by Swiss business agency ABB.

“We continued to take full advantage of the global industrial recovery in the third quarter with excellent order growth, slightly higher revenues and, thanks to our cost take-out program, strong earnings as well,” said the group’s chief executive Joe Hogan.

“Utility spending in power transmission equipment remains muted, a trend that we expect to continue into next year.”

“Still, we see plenty of opportunities for growth, especially in areas like renewable energy and industrial efficiency, and in the fast-growing emerging economies,” he added.

ABB cited a major third quarter orders to connect an offshore wind farm to the German grid and for solar power, as well as in industrial sectors.

Earnings before interest and tax (EBIT) fell by 19 percent to $1.16 billion, but the engineering giant’s global order books grew by 16 percent to $8.2 billion in the third quarter.

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Swedish banking giants report mixed fortunes

Swedish bank Nordea on Thursday posted falling profits in the second quarter while competitor Handelsbanken announced growing figures for the same period.

Swedish banking giants report mixed fortunes
Handelsbanken CEO Pär Boman. File photo: TT

Nordea's net profit fell by 11 percent to €686 million ($928 million), compared to €771 million a year earlier.

"Interest rates continue to come down and the general level of economic activity as well as volatility is low," Nordea chief executive Christian Clausen said in a statement.

"We have seen continued strong activity in our savings area and in the corporate advisory business."

Revenue was almost stable at €1.368 billion, compared to €1.391 billion for the same period last year.

"Low loan growth and interest rates also put pressure on our net interest income," Clausen said.

The bank said that its cost-cutting plan was "progressing as planned" and that it expects to see the results by the end of 2014 and onwards.

Nordea said it has saved €300 million since the launch of the cost-reduction measures at the beginning 2013.

The second quarter looked better for Handelsbanken, which posted profits increasing by 9.0 percent compared to a year earlier to 4.034 billion kronor ($590 million).

Revenue reached 6.704 billion kronor, slightly above the 6.653 billion kronor the bank posted in the same period of 2013.

The loan loss ratio was 0.07 percent, the same as last year.

Handelsbanken is Sweden's largest bank in terms of deposits.

Between April and June, its liquidity reserves stayed above 800 billion kronor, as the bank continued its expansion in the British market.

"The bank has decided to establish a fifth regional bank in the UK, with its head office in Leeds," Handelsbanken said in a statement, adding that this would start in the first quarter of 2015.