Byline: James O'Brien
Engineer ABB swung to a net profit for the first time in almost two years in the first-quarter but bleeding at businesses up for sale slowed its turnaround.
Net profit at the maker of power transmission systems, electric motors and industrial robots was just pounds 2.27 million as charges and losses on discontinued operations offset a continued improvement in core power and automation technologies divisions.
'Ongoing losses on discontinued operations overshadows the improvements,' said the institutional sales team of Swiss bank AKB in a note to clients.
Sales rose just one per cent to pounds 2.47 billion although operating income more than doubled to pounds 132 million, in line with analysts' forecasts, as the company's cost cutting programme bore fruit.
'The results show the group is making headway towards its 2005 goals in its core businesses,' said Commerzbank analyst Will Mackie.
'All in all the set of results should provide assurances for those looking for a medium term recovery in ABB.'
Chairman and chief executive Juergen Dormann has admitted the firm almost went bust in 2002 after acquisitions under former management left it debt-laden and unwieldy.
The group's West Midlands subsidiaries include ABB Manufacturing & Consumer Industries Division at Birmingham Business Park; ABB Automation Technology Products, Coventry; ABB Utilities at Stone and ABB Process Industries Division, Telford.
With power technologies set to be a growth driver for the company as a result of infrastructure spending in China and India and from rebuilding of the North …