ABB profits drop but renewables fill order books

28th October 2010, Comments 0 comments

Swedish-Swiss engineering giant ABB on Thursday posted a 25 percent drop in third quarter net profit although order books grew strongly, fuelled partly by demand for renewable energy.

Net profit in the third quarter reached 774 million dollars (560.1 million euros), compared to a figure of 1.04 billion dollars 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 dollars 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 dollars, but the engineering giant's global order books grew by 16 percent tpo 8.2 billion dollars in the third quarter.

© 2010 AFP

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