ABB records 19% growth in Q3 EBIT

25 October 2007 06:14  [Source: ICIS news]

SINGAPORE (ICIS news)--Swedish-Swiss engineering group ABB posted on Thursday a 19% rise in third quarter earnings before interest and taxes (EBIT) in local currencies due to higher demand growth for power infrastructure and operational improvements.

Third quarter EBIT rose to $1bn (€700m), leading to an EBIT margin of 14.4% compared with 11.8% in the same quarter last year, ABB said in a statement.

The firm, which sold its Lummus Global business in August, said that third quarter net income rose 86% to $738m while orders jumped 25% in local currencies to $8.3bn.

ABB credited its performance to investments in emerging markets to expand power infrastructure and investments in mature markets to replace aging equipment and strengthen grids.

Industrial businesses also continued to invest in productivity improvements and cost reductions by lowering energy consumption, the company added.

ABB also saw cash flow from operating activities rise to $886m compared with $523m in the third quarter a year ago.

The company said it was maintaining its strategy and financial plan for 2007 to 2011, which it announced on 5 September. It aimed to achieve a compound annual growth rate (CAGR) for revenues over the period of between 8-11% and an EBIT margin of 11-16%.

Earnings per share were expected to grow at a CAGR of 15-20% while return on capital employed, after tax, was forecast to exceed 30% by 2011, ABB said.

It also anticipated the business environment during the rest of 2007 and into the first half of 2008 to "remain in line with the positive market conditions seen in the first nine months of this year".

($1=€0.70)

By: Jeanne Lim
+65 6780 4359

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