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ZURICH, Switzerland - Swiss-based ABB Group, maker of power transmission equipment, saw third-quarter net profit rise 12 per cent to over US$1 billion, helped by a $380 million boost from reversing set-asides for taxes, antitrust fines and restructuring charges.
The company recorded a net profit of $927 million during the July-September period of 2008, it said Thursday. Revenue during the third quarter this year fell 10 per cent to $7.91 billion, while orders dropped 21 per cent to $7.06 billion.
Analysts at Zuercher Kantonalbank noted that without the boost ABB received from the release of provisions, results fell sharply below expectations.
Shares in ABB fell 4 per cent to 19.62 Swiss francs ($19.14) on the Zurich exchange in early trading Thursday.
"Order trends were in line with what we saw in the second quarter, with steady demand in power and oil and gas but lower base orders in industrial markets," said ABB Chief Executive Joe Hogan.
"We'll continue to focus on making sure our costs are in line with market demand, but at the same time stay aggressively positioned to capture the significant growth opportunities in power infrastructure, renewables, energy efficiency and emerging markets."
ABB offered no outlook for the coming months citing volatile market conditions through 2010, but said there remains worldwide demand for improved energy infrastructure. The company makes power transmission and distribution equipment and automation technology to control equipment in factories and utilities.
"However, it remains unclear when and how quickly capital investments by customers will recover from the downturn," ABB said. "In addition, the volatility of raw material prices and the limited availability of project funding continue to influence the timing of many power and industrial investment decisions, especially among small to medium-sized companies."
ABB, which employs about 120,000 people worldwide, said it still faces regulatory probes that could result in further costs.
ABB was one of six companies fined by the EU earlier this month for agreeing not to sell power transformers - used to modify the voltage in electricity transmission networks - in each other's markets. Brussels also fined Alstom SA and Areva T&D SA of France, and Asian companies Fuji Electrics, Hitachi and Toshiba.
The company said its cables business is also under investigation by the EU for alleged anti-competitive practices.
ABB previously announced it had informed the U.S. Department of Justice and the U.S. Securities and Exchange Commission about suspect payments made by employees of company subsidiaries in Asia, South America and Europe.
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