Swiss-Swedish engineering firm ABB has returned to profit after two years in the red, reporting net profit of $4 million (SFr5.2 million) in the first quarter of 2004.This content was published on April 29, 2004 - 11:26
The group said the upturn was the result of a widespread cost-cutting programme.
It was the company’s first quarterly profit since the second quarter of 2002. Results for the same period the year before showed a $45 million loss.
“There was a steady progress on all fronts,” said chief executive Jürgen Dormann and predicted further progress over the year.
“We see 2004 as a year of more robust performance and improved profitability. We expect demand in most markets to grow.”
Sales rose one per cent to $4.36 billion while orders totalled $5.38 billion. Demand for ABB’s factory automation controls rose by more than 50 per cent in China and India, with orders for power equipment seeing similar growth in Asia and eastern Europe.
Will Mackie, an analyst at Commerzbank, said the quarterly results were a positive sign that ABB had turned a corner.
"The results show the group is making headway towards its 2005 goals in its core businesses," he said.
"All in all the set of results should provide assurances for those looking for a medium-term recovery in ABB."
Brink of collapse
ABB has been hit by cumulative losses of more than $2 billion over the past three years.
Costly asbestos lawsuits against its former combustion engineering unit brought the company to the brink of collapse. ABB still faces appeals against a key settlement of over $1 billion, but remains confident these will be resolved.
A programme of sweeping cost cuts and the shedding of around 40,000 jobs has helped to pull ABB back into profitability, saving the company $240 million in the first quarter.
Dormann said he was confident the company would reach its 2005 targets for earnings and debt.
swissinfo with agencies
The Swiss-Swedish group reported net profit of $4 million in the first quarter of 2004.
It's the first three-month profit in two years.
The firm reported a loss of $45 million in the first quarter of last year.
Sales rose one per cent to $4.36 billion while orders totalled $5.38 billion.
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