Zurich: Engineering giant ABB said Thursday its annual net profit slipped 7.0% in 2009 to $2.9 billion (€2.1 billion), as it grappled with a lingering industrial slowdown from the recession.
The Swedish-Swiss group said it had seen a slight recovery on the final three months of the year generated by business in Asia, the Middle East and Africa, marking a turnaround from the decline in key emerging markets it already experienced in late 2008.
“By acting quickly and decisively, we delivered a 2009 result well within our profitability target, despite the worst recession in memory, said chief exective Joe Hogan.
But demand remained weak in Europe and North America, as depressed industrial markets outweighed government-stimulated investments in new power supply and equipment.
“ABB’s fourth-quarter orders stabilized versus the third quarter of 2009. ABB has seen what it believes is a bottoming of its short cycle businesses,” the group said in a statement.
“However, given the longer-term nature of the ABB portfolio, management’s outlook for the company’s businesses for 2010 and the overall economy remains uncertain,” it added.
Analysts at Bank Wegelin said ABB’s medium term prospects appeared intact “even though 2010 should again be a kind of transition year.”
Net profit was slightly above the average of analysts’ expectations polled by Swiss business news agency AWP.
Hogan said: “We are in a stronger position today than we were a year ago and have successfully positioned ourselves for growth as the economy recovers.”
Orders dropped by 19% in 2009 compared to the previous year, at just under $31 billion, mirroring the decline suffered mainly in the later stages of 2008.
Revenues and full year pre-tax earnings dipped by nine percent, the latter returning $4.1 billion.
ABB said it was stepping up cost cutting, targeting $3.0 billion in savings by the end of the year instead of the previously stated $2.0 billion.