ABB profits slow as big orders drop

Electricity giant ABB made $623 million (SFr655 million) in profit for the second-quarter of 2010, an eight per cent slip from one year ago.

The report released on Thursday showed the second consecutive decline in quarterly earnings for the Swiss-based company, the world’s largest builder of electricity networks.

The company, which also builds robots for industrial use, blamed the slowdown on European and United States buyers who had postponed large investments in items like electricity grids.

Smaller orders, those less than $15 million, form the backbone of profits at the company and were up 15 per cent compared with the previous quarter. Large orders dropped 37 per cent but they included an $89 million contract from the Saudi Electricity Company to build a new substation for the King Abdullah Financial District in Riyadh. In all, orders were up five per cent against the same quarter last year at $7.66 billion.

Cost-cutting measures resulted in savings of $400 million during the quarter, which helped keep the company profitable, ABB said in a statement.

“The strong second quarter results show how we are using our improved cost base and leading position in key industrial markets to take maximum advantage of the global economic recovery,” Chief Executive Officer Joe Hogan said in the statement. “It’s the great strength of ABB’s portfolio that automation can drive profitable growth during a period of lower power demand.”

swissinfo.ch and agencies