ABB finds “organic growth” in 2005
ABB’s 2005 net income reached $735 million compared to a $35 million loss in 2004, with strong increases in orders, revenues and earnings. The company sees several areas of strengths looking to 2006.
“We have successfully moved into a phase of profitable organic growth,” said Fred Kindle, ABB President and CEO. “Our market-leading positions led to a significant increase in orders and revenues, and further operational improvements contributed to a strong increase in (earnings). We met our original 2005 targets which, in view of the special charges throughout the year, is a solid achievement. A strong second half of 2005 has given us a good basis now to enter 2006 and generate further profitable growth.”
The Power Technologies division reported a 64% earnings increase in the fourth quarter, in spite of $43 million in charges related to the previously announced transformer consolidation program. The Automation Technologies division increased earnings by 25% in the quarter, reflecting further operational improvements.
ABB sees significant room for growth in 2006. “Demand for power transmission and distribution infrastructure is expected to continue growing in Asia, the Middle East and the Americas. Equipment replacement and improved network efficiency and reliability are forecast to be the drivers of higher demand in Europe and North America,” a company release said. “The company believes the U.S. Energy Bill and European Union regional interconnection projects will have a positive impact, mainly in 2007 and beyond.”
Automation growth, especially in the oil, marine and minerals sectors, is also expected to be strong. “If oil prices remain at current levels, ABB expects further investments to expand both production and refining activities, as well as the power infrastructure and marine shipping needed to support that expansion,” the company said. “Overall, automation-related demand growth is expected to be strongest in Asia and the Americas in 2006, with more modest growth in Europe.”