Thu Jul 26, 2012 2:29am EDT
* Q2 profit $656 mln, below poll of $728
* Q2 orders of just over $10 bln, ahead of estimates
* China Q2 orders grow vs Q1, Europe stable despite debt
By Catherine Bosley
ZURICH, July 26 (Reuters) – Engineering firm ABB
hailed an uptick in China and resilient sales in the United
States and parts of Europe to back an upbeat view of the future
as second quarter profit missed forecasts.
The company said the tide seemed to have turned after a
period of tough competition on prices and weak demand for power
products such as transformers for utility companies, which has
been hit by capital expenditure squeezes and government
ABB said although Chinese orders declined 2 percent from a
year ago, they were higher than in the first quarter while price
competition on new power orders showed signs of easing and
utility, oil and gas customers were investing in new equipment.
Overall orders in the second quarter hit $10.052 billion,
against an estimate of $9.909 billion, while net profit of $656
million trailed a forecast of $728 million, due in part to the
strengthening of the U.S. dollar and about $100 million in
charges related to its purchase of U.S. low voltage product
manufacturer Thomas & Betts.
“The macroeconomic view remains uncertain, but the positive
developments we’ve seen in China, the continued strength of the
U.S. market and our resilience in Europe make us more confident
about the short-term outlook than we were three months ago,”
Chief Executive Joe Hogan said.
In China, demand has been surging in factories for
automation technology, a boon for companies such as ABB that
make equipment such as sensors, frequency converters and
The firm, which also makes components for the oil and gas
industry and is increasingly focusing on green technology, said
the longer-term outlook was also favourable as companies
increasingly sought to save energy and urbanisation increased in
some emerging markets.
Compared with a year ago, orders in Europe grew 2 percent in
Europe, 10 percent in the Americas and 34 percent in the Middle
East and Africa.