ABB to cut more costs as income falls in 2010

The Swiss-based engineering group ABB has announced a net profit of $2.56 billion (SFr2.45 billion) for 2010, 12 per cent less than a year ago.

Sales at the group, which makes power equipment and industrial robots, also dropped slightly, down one per cent to $31.6 billion. But net profit for the fourth quarter was up 30 per cent at $700 million.

In a statement from its Zurich headquarters, ABB said it planned to further reduce costs this year by more than $1 billion. The company completed a $3 billion cost-cutting programme at the end of December.

However, the group has forecast improved demand in both emerging and mature markets.

“We see plenty of growth opportunities as we head into 2011 in both the short-term industry-driven businesses as well as later in the year when we expect utility spending on power equipment to begin a recovery,” said ABB chief executive Joe Hogan.

The statement added that emerging markets were set to be “significant drivers of growth” as they built up their electrical grids and expanded industrial production.

Demand in mature markets was also expected to improve after two years of growth, the group added.

ABB in January completed the acquisition of Baldor Electric, a North American leader in industrial motors. The group sees the $4.2 billion deal as an “important step” in the strategy to build its position in the key North American industrial automation market.