UPDATE 3-Big industrial orders lift ABB Q3; power worries

* Q3 net income $774 mln, vs forecast of $670 mln

* Short, mid-cycle business to support growth into 2011

* Shares slip 1.5 percent, underperform sector index

(Adds shares, trader comments)

By Catherine Bosley

ZURICH, Oct 28 (BestGrowthStock) – Swiss engineering group ABB
(ABBN.VX: ) beat expectations with its third-quarter profit (Read more your timing to make a profit.) as
large industrial orders flowed in once again, but investors
fretted about when its transmission business would improve.

ABB posted a third-quarter profit (Read more your timing to make a profit.) of $774 million, beating
a Reuters poll, thanks in part to an offshore wind farm order
from the German grid, as well as orders from the solar power and
the minerals and metals industries. [ID:nLDE69L1N2]

But shares in the group fell 1.5 percent to 21.23 francs at
0942 GMT, underperforming a 0.4-percent rise in the sector index
(.SXNP: ), on disappointment that it had not brought forward its
timeframe for improvement in the transmission business.

“The figures were good,” a trader in Zurich said. “(But) the
outlook wasn’t changed, which in the short term may not be
enough.”

ABB, whose business is dependent on customers’ capital
expenditure plans, suffered a fall in industrial orders as a
result of the global downturn.

The group has seen its short-cycle business, with products
ranging from software to industrial robots, recover well and
expects this trend to continue into 2011, echoing remarks made
in September. [ID:nLDE689046]

But for ABB’s longer-cycle units, which produce power
transformers for utility companies, the outlook for the rest of
2010 remained mixed, ABB said, a view it also gave last month.

Third-quarter orders in the power products division, which
includes transmission, fell 7 percent in dollar terms.

“Further upwards movement for the stock should be made
somewhat more difficult by its uncertain outlook in the energy
field,” bank Wegelin said in a note.

POWER TURNAROUND

Overall orders in North America, Europe and Asia rose by
double digits, ABB said.

“We see plenty of opportunities for growth, especially in
areas like renewable energy and industrial efficiency, and in
the fast-growing emerging economies,” Chief Executive Joe Hogan
said.

ABB’s comment follows remarks from Germany’s Siemens
(SIEGn.DE: ), which has a market capitalisation about twice that
of ABB’s and expects fourth-quarter operating profit to be
higher year-on-year. [ID:nLDE68F187]

Smaller French rival electrical equipment-maker Schneider
(SCHN.PA: ) has also raised its guidance. [ID:nLDE69I11T]

ZKB analyst Richard Frei, who said the results showed a
positive strong recovery, expects transmission orders to recover
some time in the middle of 2011.

“Perhaps towards the middle of the year the recovery signs
for the systems business should become evident,” he said.

In China the power products unit posted a fall in orders,
reflecting rising competition from Chinese players and the
government’s “buy local” policy that has been posing a challenge
to many foreign industrial companies.

(Additional reporting by Rupert Pretterklieber)

UPDATE 3-Big industrial orders lift ABB Q3; power worries