ABB reports strong finish
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Motors, drives and automation specialist ABB said today (17 February) that it had emerged stronger from 2010 as growth accelerated on industrial demand with customers expanding capacity and improving efficiency. The Swiss-owned group reported strong order growth in the fourth quarter of 2010 with orders up 18%, and revenues 6% higher driven by strong demand for energy efficiency and improved productivity as well as recovering investments into power infrastructure.
Orders also increased for power distribution equipment used to deliver reliable power to industrial and commercial customers. Large orders (above $15 million) increased by 21% on the award of several large power transmission projects in Europe and the Middle East.
Earnings rose 23% to $978 million in the fourth quarter while the company's $3 billion cost take-out program was completed on target. ABB said it plans to further reduce costs in 2011 by more than $1 billion.
Revenues for 2010 as a whole were a marginal 1% down at $31.6 billion (2009: $31.8bn) while whole year earnings dipped 7% to $3.8 billion (2009: $4.1bn).
CEO Joe Hogan said he was satisfied with the 2010 results as ABB was in a stronger position than before the financial crisis. "Demand from industry and utility clients for short-cycle products gained momentum, contributing to the fastest base order growth in the past two years. Revenue growth accelerated compared to the third quarter, driven by strong industrial demand for energy efficiency and higher productivity. We achieved profitability well within our target range by leveraging our lower cost base. That allowed us to benefit from the ongoing recovery in automation and to successfully counter demand and price weakness in our longer-cycle businesses."
Looking to 2011, Hogan said he saw "plenty of growth opportunities". He went on: "Long term trends for increased energy efficiency and flexible, more reliable power infrastructure remain very strong. ABB will seize these opportunities with a leaner cost base, an enhanced product portfolio and a more customer-focused organization."
