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ABB logs 19% drop in orders
By Antonio Ligi |
February 13, 2009, Friday
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Print Edition
Print Edition
ABB Ltd, the world's largest builder of electricity grids, had a 19-percent decline in fourth-quarter orders and said it can't predict when government stimulus packages and freer credit will help restore investment.
Bookings dropped to US$7.18 billion from US$8.87 billion a year earlier on fewer infrastructure and industrial contracts above US$15 million, the Zurich, Switzerland-based company said in a statement yesterday.
"You can really see that the large orders are missing in Power Systems," said Zuercher Kantonalbank analyst Richard Frei. "It's not extremely negative, but you can see that it is not through yet. It will probably get worse."
The Swiss maker of factory robots and transformers said the cost and scarcity of project funding has delayed power investment decisions and declines in the construction and automotive industries reduced orders for automation gear, Bloomberg News reported.
ABB has announced plans to reduce costs by US$1.3 billion by 2010 after orders slumped in October and November.
"The outlook for 2009 remains uncertain," Chief Executive Officer Joe Hogan said. "We aim to come out of this downturn in a stronger competitive position and we confirm our 2011 targets."
The company predicts annual earnings growth of at least 15 percent through 2011 as China, India and the Middle East invest in grids.
Fourth-quarter profit fell 88 percent to US$213 million after ABB booked US$870 million in provisions for a cartel probe and cost-reduction expenses and an asset sale boosted year-earlier earnings.
Bookings dropped to US$7.18 billion from US$8.87 billion a year earlier on fewer infrastructure and industrial contracts above US$15 million, the Zurich, Switzerland-based company said in a statement yesterday.
"You can really see that the large orders are missing in Power Systems," said Zuercher Kantonalbank analyst Richard Frei. "It's not extremely negative, but you can see that it is not through yet. It will probably get worse."
The Swiss maker of factory robots and transformers said the cost and scarcity of project funding has delayed power investment decisions and declines in the construction and automotive industries reduced orders for automation gear, Bloomberg News reported.
ABB has announced plans to reduce costs by US$1.3 billion by 2010 after orders slumped in October and November.
"The outlook for 2009 remains uncertain," Chief Executive Officer Joe Hogan said. "We aim to come out of this downturn in a stronger competitive position and we confirm our 2011 targets."
The company predicts annual earnings growth of at least 15 percent through 2011 as China, India and the Middle East invest in grids.
Fourth-quarter profit fell 88 percent to US$213 million after ABB booked US$870 million in provisions for a cartel probe and cost-reduction expenses and an asset sale boosted year-earlier earnings.
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