Abb Share Discussion Threads

[ariane] 19/9/2007 11:46

Advanced ABB technology helps Alstom set a new rail speed record
2007-04-04 - A French train set a new world rail speed record of 574.8 kilometers per hour (356 miles per hour) this week. Among the technologies onboard was a state-of-the-art ABB traction transformer, which is helping trainmakers create a new generation high-speed rail service.

By Editorial services
The new record was set by Alstom, SNCF (Société Nationale des Chemins de fer Français - France's national rail carrier), and RFF (Réseau Ferré de France - the company that owns and manages France's rail network).

The record-breaking run was on the TGV (train à grande vitesse) east line, a 300-kilometer stretch of new high-speed track scheduled to open in June, 2007, which will significantly reduce travel time between Paris and destinations in Germany, Luxemburg and Switzerland.

It will also cut the journey between Paris and Strasbourg on France's eastern border in half, to 2 hours 18 minutes in June, and less than two hours when the line is fully commissioned in 2008. Trains using the TGV east line will operate at speeds of 320 kilometers per hour (km/h), or 20 km/h faster than other TGV trains.

The old world rail speed record is 515.3 km/h (320 mph), set by a TGV train in 1990. The absolute speed record was set by a Japanese magnetic levitation prototype train - Maglev - in 2003, which runs on a special track not compatible with railway lines. It reached 581km/h (361mph).

Alstom has been developing a new generation of very high-speed AGV trains (automotrice à grande vitesse) that over time will succeed the TGV series.

The next generation
The record run on Tuesday, April 3, was designed to test the performance and reliability of new rail and train infrastrucuture and material under extreme conditions, as SNCF upgrades its high-speed TGV trains.

The modified test trainset included two power cars, three TGV double-decker carriages and two AGV motorized bogies (rail chassis with wheels). It develops an output of 19.6 megawatts (more than 25,000 hp) versus 9.3 megawatts (12,500 hp) in a conventional TGV train.


The record attempt by a modified TGV took place on a new high-speed track between Paris and Strasbourg.

The innovative AGV traction chain (the equipment which drives the train) located in the middle car and feeding four permanent magnet traction motors mounted onto the adjacent boggies is fitted with an ABB traction transformer which was developed, designed and manufactured by ABB Sécheron Ltd.

AGV trains incorporate fundamental breakthroughs compared to TGV trains. Instead of using separate power cars at either end, AGV traction chain motors are located beneath the floors of passenger carriages, creating lower power levels per wheel for better track adherence and more comfort at higher speeds. This also means there's room for more passengers aboard AGV carriages, which have targeted speeds of 350 km/h.

A key partner
ABB is a key partner for Alstom in the development of its AGV technology, and provides the traction transformer which is the bulkiest component of the traction chain.

ABB's transformer features reduced size and weight allowing it to be mounted underfloor. It is also a multi-system unit that can operate anywhere in Europe, at any voltage.

The record sets a new ABB benchmark in distributed power technology for very high-speed trains. With its state-of-the-art traction transformers, ABB is a key player in this global high-speed rail market thanks to ABB Sécheron in Geneva (Switzerland), and production facilities in Geneva, Halle (Germany), Vadodara (India) and Datong (China).

[ariane] 18/9/2007 14:46

ABB wins wind farm power order from E.ON worth over 400 mln usd
Date : 18/09/2007 @ 14:39
Source : TFN


ABB wins wind farm power order from E.ON worth over 400 mln usd


ZURICH (Thomson Financial) - ABB Ltd said it has won an order worth over 400
mln usd from E.ON Netz GmbH to supply power equipment connecting the world's
largest offshore wind farm to the German electricity grid.
ABB will supply system engineering and installation of the power equipment
for the offshore wind farm, located 100 kilometers off the German coast in the
North Sea.
Germany currently uses wind for about 7 pct of its electricity requirements
and expects this to rise to 14 pct by 2020.
The wind farm is scheduled to start operations in September 2009.
[e-mail]
at/sf/ra

[ariane] 17/9/2007 17:42

Companhia Paranaense de Energia: Benefit from Utility Restructuring
posted on: September 17, 2007 | about stocks: ELP
While ABB (ABB) will benefit from upgrading the old power grids and power networks, as well as building new ones in emerging markets, we can find some companies that are going to benefit from another source of the same spectrum.

Emerging markets are clearly facing a big dilemma: if they want to continue growing they have to avoid a basic thing that could hinder their growth: power shortages. That's where ABB comes into play: upgrading existing infrastructure. But also, to avoid those shortages utilities must be fully on board, and they have to start investing more and be invested in more. And that is where Companhia Paranaense (ELP) comes in.

One great thing about ELP is that it's needed tremendously in a high-speed growing Brazil, and the government recognizes that. As Brazil grows so does ELP, and so does investment in ELP. Brazilian government recognizes the need for further investment into this and other companies and has restructured utilities from higher government control system and regulations to a free market that provides enormous opportunities for these companies and increase investments, and by this furthers growth of these companies and the country itself.

Power demand in Brazil is growing rapidly as its economy is on a fast track to success - an excellent opportunity for investment! As investment rises, so does the stock price. As the stock price rises so does the dividend payout and a greater return on investment. As US utility stocks are just a safe haven, almost like a bond, this Brazilian play is a contrary growth story. And that was proven by Thursday's upgrade and bullish comments by Bear Stearns.

"Argentina's power shortages have worsened. Its government may have to take unpopular steps. Some countries are on the verge of blackouts and rationing (great for both ABB and ELP, I'd say). A lot of times countries don't give in to business-friendly regulatory models until they have no choice," Michels from Bear Stearns states. While Argentina is still not a investor-friendly country (yet), Brazil is and it has ""investor-friendly regulatory models," Michels said.

Following recent strong market corrections and panic selloff across all sectors, especially in the utility sphere, I suggested adding ELP slowly to one's portfolio, by accumulating at support levels. Market weakness has provided us with a great buying opportunity in ELP as it dropped dramatically from $19 to $16, or 20%, in a matter of couple of weeks.

With the market recovering, ELP quickly emerges on the top as a favorite bottom picking growth-value play, given the company's incredible fundamentals and earnings performance, with a promising future growth potential. Both short-term and long-term outlook continues to remain extremely positive.

With new plans around the corner to engage in ethanol export activities from Brazil to other energy needy regions, and historically strong earnings with even better outlook this time around the corner, I think that Bear Stearn's price target of $20 might even be conservative.

[ariane] 17/9/2007 15:19

ABB "buy"

Monday, September 17, 2007 9:54:19 AM ET
Deutsche Bank

LONDON, September 17 (newratings.com) - In a research note published on September 14, analysts at Deutsche Bank maintain their "buy" rating on ABB (ABJ.ETR). The target price is set to CHF32.

[ariane] 14/9/2007 06:10

ABB
Sep 13, 2007 at 01.53 PM News & Company Overview






HSBC underweight on ABB; target of Rs 1178



HSBC Research has recommended an underweight rating on ABB with a target of Rs 1178.



HSBC Research report on ABB:



Valuation getting stretched

Business momentum to continue with revenue growth of 42% CAGR and profit CAGR of 49% over 2006-09
Raising our estimates by 10.3% and 9.3% for 2007 and 2008e and introducing 2009e
Raising target price to Rs 1178 based on June 2008; downgrading our rating to Underweight
Parent indicates continue business momentum



ABB parent has recently increased its overall guidance for revenue and EPS CAGR to 8- 11% (earlier >5% for 2005-09) and 15-20% respectively for 2011, with the focus to continue on the emerging geographies like China, India and Middle East. Also, the group is looking at improvement in the overall operating margin and RoCE of above 30% at the group level versus mid teens in 2009



ABB India as a strategic fit for the parent to be benefited



ABB India, contributing 4% of global revenue, provides the parent with a mix of low cost manufacturing base and exposure to high growth market. It has been identified as a regional hub for South Asia, catering to the high growth domestic market and acting as a manufacturing base for other geographies. ABB has been strategically identified as one of the centres of excellence and houses a Global Engineering and Operation Centre working in tandem with the parent. The elevation of Mr Ravi Uppal as President Global Markets and Member of the Group Executive Council clearly indicate the growing importance of ABB India in the overall Group strategy.



Financial and Valuation



We have revised our EPS by 10.3% and 9.3% to INR25.2 and INR37.9 for 2007 and 2008 based on the change in revenue by 7% and 8% for the same period. We have also introduced the estimates for 2009. Our estimates are 11% and 13% higher than the consensus estimates for 2008 and 2009 respectively. Based on our new estimates (49% profit CAGR growth over 2006-09e), and roll over to June 2008, we have increased our target price to INR1178 (earlier INR853). ABB India is trading at 35.2x 1-year forward earnings. We feel that all the positive upsides (and also high expectation in terms of delivery) are captured in the current valuation. Hence, we are downgrading our rating to Underweight from Neutral. At our 12-month target price, ABB will be trading at 26x 1- year forward earnings. Key business risks are a slow down in the power sector reforms, rising competition, raw material prices, execution and manpower risk.

[waldron] 09/9/2007 05:34

We don't cap capex'


ABB India has just completed investment to the tune of $100 million and has announced another $50-60 million. We can even invest more, as long as the returns justify it.







MR BIPLAB MAJUMDER, COUNTRY MANAGER AND MANAGING DIRECTOR, ABB INDIA.

Vidya Bala


ABB India's strength in power solutions and automation products, much derived from its Swiss parent, has seen the company benefit from India's initiative to enhance its power capacities as well as the increased capex spending byindustries. In an interview with Business Line, Mr Biplab Majumder, who recently took over as Country Manager and Managing Director, ABB India, discusses India's power reforms and the company's domestic strategies and plans.

Excerpts from the interview:

Indian industry has so far been low on automation compared to global standards. Is this changing?

Indian industry, on the whole, is characterised by low level of automation awareness and adoption. Likewise, even the power sector, in order to be more efficient, needs to leverage technologies such as SCADA, Energy Management Systems and utility automation, across the value chain, to a far greater extent.

Even where automation exists in Indian industry, it is at a lower technology threshold compared to world standards. The total automation market in China, for instance, is 8-10 times larger than in India. Based on a historical perspective, automation has been looked upon more as a shop-floor tool than a 'business performance enabler'.

There are, of course, a few exceptions. For instance, some of our steel plants, refineries, petrochemical plants and food and pharma units have adopted high-end automation technologies.

The manufacturing sector's growth will, however, depend upon a multitude of factors, one of the most important being leveraging of automation technologies. Indian industry has also long believed that its 'cost advantage' lies in lower labour costs but this attitude is fast changing.

How do you view the industrial capex in India at present? Which sectors have shown greater momentum?

We have seen acceleration in industrial growth, led by core sectors such as iron and steel, cement, pulp and paper, construction, oil, gas and petrochemicals. Capacity and productivity focus are driving investments, as Indian industry gears up to meet rising domestic consumption needs and, at the same time, strive for global competitiveness. The pick-up in our automation business reflects this, with several key orders from the metals, cement, pulp and paper and construction sectors being received for integrated electrical and automation solutions.

Are you positive about the country achieving its target in the power segment in the Eleventh Plan even as the earlier ones have shown slippages?

In the Eleventh Plan, India is planning to add over 78,500 MW of generation capacity and this is certainly an ambitious aspiration, given that we have not added more than 22,500 MW in any previous Plan period. Of course, some of the trends are encouraging. The sector has now been opened up and private participation is on the rise. Several UMPP (Ultra Mega Power Projects) are on the anvil.

Coal availability has been eased to some extent as thermal power continues to be our mainstay. At the same time, hydel power, alternative energy sources and even captive power development are increasingly gaining attention. Given the decent start so far and the projects in the pipeline, even an average addition of 10,000 MW per annum (around 50,000 MW during the full Plan) would be a laudable achievement.

The rural electrification programme, Rajiv Gandhi Grameen Vidhyutikaran Yojana (RGGVY scheme), and the revitalised APDRP (Accelerated Power Development and Reform Programme) continue to drive the Government's promised Power to All by 2012 vision.

From a transmission and distribution perspective, building a national transmission network, enhanced system efficiencies, grid reliability and T&D loss reduction continue to be the key priorities even as utilities increasingly leverage the latest technologies on offer to bring technical and operational efficiencies as well as financial viability to their operations.

A delay in Indian power reforms could slow down the sector in which you operate. As you derive much of your revenue from the domestic market, what strategies are you adopting?

ABB in India has strength in power and automation technologies and this gives us a wide operating window. In terms of our portfolio, we do three types of business - projects, products and services. Here, in terms of projects versus products and services, we had an 80:20 mix a few years ago.

Our portfolio realignment strategy has been extremely successful. The growth of our standard products business, through market penetration, and range expansion have yielded good results. Service business growth is also on track.

In fact, products and services together are contributing nearly 50 per cent of the volumes. Meanwhile projects continue to be the mainstay as ABB caters to its utility and industry customers through turnkey solutions, power and automation technologies. Basically this now gives us three strong legs instead of one!

To generate incremental growth and support our traditional businesses, we have introduced several new verticals and revenue streams that provide both power and automation solutions in sectors such as water, ports, railways, asset management services, etc.

While we focus on top-line growth, we shall maintain our focus on operational efficiencies and managing growth in a profitable and sustainable way. Going forward, we shall continue to increase 'depth' and 'breadth' and at the same time, strengthen our resource base and sharpen our delivery systems.

Could you comment on ABB India's growing role in the region as a global resource base?

Besides serving the needs of the domestic market, ABB is also increasingly leveraging India as a key resource base in line with its global footprint approach, be it projects, products, services, R&D or engineering. India has been assigned the global factory role for several products such as High and Medium Voltage circuit breakers, magnetic actuators, etc, and also supplies many components and sub-assemblies.

India has also been designated as the hub for the South Asia-Pacific region and we have a key role to play in the region. ABB technologies and products are universal to the extent that the company no longer believes in Made in India, China or US but adopt a Made in ABB philosophy.

What are the capital investment plans for ABB India?

To meet growing power and industrial sector demand, capacity and range expansion programmes are under way across locations. ABB India has just completed a comprehensive investment programme for capacity and range expansion, to the tune of around $100 million and has subsequently announced another $50-60 million investment to be completed by the end of 2008. However, based on business needs we can even invest more, as required, as long as the returns justify it. In a nutshell, 'we don't cap capex'!

Many new products and verticals have been added to support the growth of existing business in the quest to constantly add new revenue streams for incremental growth. Several new manufacturing units have also been set up in the last two years in Bangalore, Vadodara, and Nashik and more recently a Low Voltage Distribution Electricals Unit at Haridwar. Capacity expansion is also under way across businesses and locations with plans for further enhancement.

[waldron] 06/9/2007 18:33

ABB "overweight"

Thursday, September 06, 2007 10:44:40 AM ET
J.P. Morgan Securities

NEW YORK, September 6 (newratings.com) - Analysts at JP Morgan maintain their "overweight" rating on ABB Ltd (ABJ.ETR). The target price is set to CHF30.

In a research note published this morning, the analysts mention that the company expects to achieve an 8%-11% sales CAGR and EBIT margins of 11%-16% in 2006-2011. These new targets are in-line with the estimates, the analysts say. ABB appears to be following the right strategy by focusing on improving its core operations and on capitalizing on the robust end-market outlook, JP Morgan adds.

[waldron] 06/9/2007 16:49

ABB "buy"

Thursday, September 06, 2007 9:28:48 AM ET
Dresdner Kleinwort Wasser.

LONDON, September 6 (newratings.com) - Analyst James Stettler of Dresdner Kleinwort maintains his "buy" rating on ABB Ltd (ABJ.ETR). The target price is set to CHF32.

In a research note published this morning, the analyst mentions that the company has indicated that it remains focused on the significant growth opportunities in its core markets and there is a possibility of margin upside going forward. With respect to balance sheet releveraging, ABB appears unwilling to assign a time frame, the analyst says. The company requires time to consider acquisition opportunities, given that its aim is value generation, Dresdner Kleinwort adds.

[waldron] 06/9/2007 12:01

ABB's new financial strategy to have no impact on ratings - Fitch
Date : 06/09/2007 @ 11:56
Source : TFN


ABB's new financial strategy to have no impact on ratings - Fitch


MUMBAI (Thomson Financial) - Fitch Ratings said the Swedish-Swiss
engineering group ABB Ltd's financial strategy will have no immediate rating
impact on the company.
ABB has a long-term issuer default ratings of 'BBB+' with stable outlook,
senior unsecured 'BBB+' and short-term IDR 'F2'.
For 2007-2011 ABB has set new divisional revenue and earnings goals and
group-wide profitability and cash flow targets, which provides considerable
headroom to make a large, debt-funded acquisition or a significant share
buy-back, the rating agency said in a news release.
"Having repaid a substantial portion of its debt over the past three years,
ABB is now likely to use its improved financial flexibility to re-leverage
either for M&A activity or a return of cash to shareholders," said Tom Chruszcz,
Director in Fitch's Industrials said.
"Depending on the size of its actions, there should be no immediate impact
to the company's credit ratings, as the present financial metrics are strong for
the ratings," Chruszcz added.

[e-mail]
pvi/aku

[waldron] 06/9/2007 06:53

Wed 10:56 ABB says evaluated more than 100 larger acquisition targets in past 18 months AFX UK Focus
ZURICH (Thomson Financial) - ABB Ltd has looked into more than 100 larger acquisition targets over the past eighteen months including some of which it is still considering, chief executive Fred Kindle said.

Speaking at the Swedish-Swiss engineering group's presentation of its new corporate strategy, including financial targets for the period 2007-2011, Kindle said that ABB has identified dozens of potentially attractive business fields.

However, most takeover targets are too expensive and remain therefore on 'hold', he said.

As larger acquisition targets, ABB considers companies with a value of 500 mln usd in established markets and 200 mln in growth markets.

Kindle also said that an acquisition in the Automation Products segment is the most likely scenario.

Commenting on the group's new targets, Kindle said that they were "ambitious but realistic".

ABB earlier today hiked its organic sales growth target for the period 2007-2011 to 8-11 pct, from 5 pct previously, saying it expects continuing demand for new and upgraded power infrastructure and further investments in productivity and energy efficiency.

In parallel, the Swedish-Swiss engineering group increased its EBIT-margin target range to 11-16 pct, from 'above 10 pct'.

Analysts said there was some disappointment over ABB's failure to announce a new share buyback, given the group's failure to identify a concrete acquisition target.

At 11.40 pm, ABB's shares were down 1.5 pct, or 0.46 sfr, at 29.42, while the SMI was off 26.65 points at 8.939.70 [e-mail] awp/at/slj

[waldron] 06/9/2007 06:36

ABB raises outlook through 2011, forecasts strong Asian demand
The Associated PressPublished: September 5, 2007

ZURICH, Switzerland: ABB Ltd., a global leader in power technologies, raised its operational and financial targets for the next five years Wednesday, forecasting strong demand for new and upgraded power infrastructure in China, India and the Middle East.

The Swiss-Swedish electrical engineering company said it is now targeting sales growth of between 8 percent and 11 percent over the next five years. Operating profit, meanwhile, should rise at an annual rate of between 11 percent and 16 percent.

Both figures were significantly above ABB's previous sales growth and margin expectations, but in line with market forecasts. ABB had widely been expected to lift its targets soon amid a global infrastructure boom and investors had already priced in their forecasts.

Shares in ABB, which have advanced more than 35 percent so far this year, fell 2.1 percent to 29.26 Swiss francs (US$24.18; €17.81) in Zurich trading.

The company predicted its Asian market will expand by more than 50 percent by 2011, twice as much as in Europe and the Americas. The market in the Middle East and Africa is expected to increase 40 percent.

Today in Business
With subprime doubt about, summer market blues persistBoeing's Dreamliner faces three-month delayECB warns of return of volatile markets"Initiatives to optimize our global footprint will continue to bring both cost and growth benefits," said Chief Executive Fred Kindle. "At the same time, we will look for value-creating external growth opportunities."

Analysts welcomed the new targets from ABB, which has been performing strongly since facing near bankruptcy in 2002 amid a global economic downturn and costly asbestos litigation in the United States.

"These are really strong targets and it shows how much ABB has improved over the past few years," said Mark Diethelm, an analyst at Zuercher Kantonalbank. He told Dow Jones Newswires that he rates the stock at market overweight.

Panagiotis Spiliopoulos, an analyst at Zurich-based private bank Vontobel, said the company's healthy position could enable it to make major acquisitions or pursue a multibillion dollar takeover in the automation sector, where ABB already is already a global leader.

"ABB could raise as much as US$10 billion (€7.36 billion) to sponsor a takeover," he said.

But, he cautioned, a global economic downturn could still slow the company's growth.

[waldron] 05/9/2007 21:47

September 5, 2007 - 5:35 PM
Energy boom lifts ABB forecast

Image caption: ABB wants to cash in on the energy boom (Keystone)

Related storiesABB sells Lummus and finds "suspect payments"
ABB launches probe as results beat forecasts
ABB posts sharp rise in net profit
Engineering group ABB has raised mid-term revenue (8-11%) and margins (11-16%) growth forecasts as it looks to exploit the world's increasing thirst for energy.
The four-year targets supersede 2005-9 goals of five per cent sales and ten per cent margin increases. A priority for the group will be improving business ethics, chief executive Fred Kindle told swissinfo.


The Swiss-Swedish company specialises in electrical equipment such as transformers and motors for power plants, and the oil, gas, mining and alternative energy sectors. Favourable economic conditions have substantially boosted demand for energy, particularly in China.



ABB plans to create 20,000 new jobs and hinted at new acquisitions, with the company expecting its own growth to double that of the market.



Kindle said the firm's ambitions to pull off a major acquisition could be helped by recent stock market volatility dampening the activity of private equity firms.



"The fact of the matter is that we have lost out to private equity competition in previous auctions (takeover attempts). They might not be so active in future which favours trade buyers [such as ABB]," he told a conference in Zurich on Wednesday.



Last month ABB finally sold its troublesome Lummus Global oil and gas business after a long-running asbestos saga involving the division that cost the company millions of dollars.



However, the company also reported several suspect payments to the US authorities in relation to the divestment. The company blew the whistle earlier this year on a price-fixing cartel in which it was involved.


Ethical questions remain

The firm is launching new initiatives to promote ethical business practices and Kindle is confident they will make their mark.



"We have been in the news every so often by reporting a suspect payment or an infringement of business ethics rules and we have to get rid of that," Kindle told swissinfo.



"The systems and processes are there; now we have to work hard so that our 111,000 employees are working up to these standards and are not bypassing them."



Kindle added that some of the ethical infringements are a hangover from previous times when rules in Europe were more lax.



"You have to take three steps back and look at the moral and legal environment then. It was not so long ago that cartels in Switzerland were perfectly allowed," he said.


Remarkable turnaround

"In the 1990s in many European countries payments to non-government officials were not necessarily bad and were sometimes even tax deductible.



"The legal and moral standards have changed here just recently. It has all changed in the last ten years and some companies have struggled to reflect these changes quickly enough."



ABB has completed a remarkable turnaround in recent years after being on the brink of bankruptcy in 2001 following a disastrous programme of unfettered expansion.



The company reported a turnover of $13.358 billion in the first half of 2007 compared with $10.78 billion in the comparable period last year. Earnings before interest and taxes (Ebit) rose to $1.852 billion ($1.137 billion in 2006).



swissinfo, Matthew Allen

[waldron] 05/9/2007 13:05

ABB "buy"

Wednesday, September 05, 2007 7:28:47 AM ET
Dresdner Kleinwort Wasser.

LONDON, September 5 (newratings.com) - Analyst James Stettler of Dresdner Kleinwort maintains his "buy" rating on ABB Ltd (ABJ.ETR). The target price is set to CHF32.

In a research note published this morning, the analyst mentions that the company has issued new targets for 2007-2011, which are in-line with the estimates and indicate that growth in its end-markets would be robust. ABB needs to issue a clear statement regarding its balance sheet development in order for its share price to react favourably, the analyst says. There is no assurance for cash returns to the company's shareholders being made at present, Dresdner Kleinwort adds.

[waldron] 05/9/2007 10:17

Swiss shares TFN market data at 10.35 am - down as ABB losses weigh
Date : 05/09/2007 @ 09:52
Source : TFN


Swiss shares TFN market data at 10.35 am - down as ABB losses weigh


ZURICH (Thomson Financial) - Major Indices:
Swiss Market Index 8,953.05, down 13.3 points
Swiss Performance Index 7,285.91, down 16.72 points


Major decliners:
ABB, down 0.36 sfr or 1.2 pct at 29.52, after the Swedish-Swiss engineering
group announced fresh target which failed to surprise on the upside and as
investors waited in vain for the announcement of a new share buyback programme
Adecco, down 0.60 sfr at 78.60

Major gainers:
Swiss Life, up 2.25 at 293.25, extending yesterday's gains after reporting
better-than-forecast first half results.
SGS, up 12 sfr at 1,448

[e-mail]
jmt/cmr/jmt/bsd/jmt/lce

[waldron] 05/9/2007 09:14

ABB Predicts Minimum 15% Profit Growth on Asia Demand (Update2)

By Antonio Ligi

Sept. 5 (Bloomberg) -- ABB Ltd., the world's biggest builder of power networks, forecast annual earnings growth of at least 15 percent through 2011 as China, India and the Middle East invest in electrical grids.

Earnings per share may rise as much as 20 percent, Zurich- based ABB said today in a statement. The Swiss company raised its profit margin target to between 11 percent and 16 percent of sales, compared with 10.6 percent last year.

ABB predicts its Asian market will expand by 50 percent over the next five years, double the pace of Europe and the Americas. China plans to spend about $33 billion this year on power infrastructure. The Swiss company said it's assessing potential acquisitions, even after some investors called for a buyback.

``Overall, the targets are good,'' said Mark Diethelm of Zuercher Kantonalbank, who has a market ``overweight'' rating on the stock. ``The lower end of the margin corridor is lower than expected, that's very cautious of ABB. I guess they wanted to take into account there may come a year that isn't that good.''

ABB declined 56 centimes, or 1.9 percent, to 29.3 Swiss francs as of 9:09 a.m. in Zurich trading. The shares have climbed almost 80 percent in the past year, giving the company a market value of 68 billion francs. The Swiss manufacturer was valued at as little as 1.7 billion francs in 2002.

Chief Executive Officer Fred Kindle underestimated the strength of the power market as well as the speed with which the company could bounce back from near-bankruptcy in 2002. Most of the goals the company hoped to reach by 2009 were achieved last year.

New Targets

Kindle also increased ABB's annual sales growth target to between 8 and 11 percent, on average. Revenue grew 11 percent in 2006 and ABB had been aiming for more than 5 percent.

Contracts in Asia include an order for switchgear and power transformers for China's Three Gorges Dam, the world's largest hydroelectric river project.

``We have seen continuous strong demand for energy and ABB is probably the best positioned company to benefit from electricity upgrades,'' said Kevin Lyne-Smith, an investment consultant at Julius Baer Holding AG's private banking division in Zurich, which manages $100 billion, including ABB shares.

ABB was formed in 1988 through the merger of BBC Brown Boveri of Switzerland and ASEA AB of Sweden, and generates about 90 percent of sales at its automation and power units. The company also makes robots used for everything from packaging cookies to the industrial milking of cows.

Acquisitions

Kindle, 48, took over in January 2005 after his predecessor sold $16 billion in bonds, stock and assets to keep the company from collapsing under the cost of asbestos claims.

The disposal of paper-making machinery and water- treatment units has helped ABB shrink its workforce to about 111,000 from a peak of 219,000 in mid-1998. The bulk of outstanding asbestos lawsuits was resolved last year with a $1.43 billion settlement plan.

After returning to profit in 2005 and breaking a four-year run of losses, ABB may make an acquisition after amassing more than $2 billion in cash. The company is currently assessing potential targets, and any deals will benefit shareholders, it said.

ABB last spent more than $1 billion on a takeover eight years ago, when it bought Elsag Bailey Process Automation NV for $2.1 billion from Finmeccanica SpA. France's Legrand SA and Milwaukee-based Rockwell Automation Inc. are now Kindle's main potential targets, Societe General analyst Gerard Moore wrote in a research note.

Some investors, including Thomas Lusetti, a Zurich-based fund manager at VP Bank AG who helps manage the equivalent of $26 billion including ABB, have joined calls for management to use surplus cash for share buybacks.

``I would like them to return cash to shareholders instead of doing a big acquisition,'' said Soren Linde Nielsen, an analyst at Jyske Bank in Silkeborg, Denmark, with a ``buy'' rating on the stock.

To contact the reporter on this story: Antonio Ligi in Zurich at [e-mail] .

Last Updated: September 5, 2007 03:40 EDT

[waldron] 05/9/2007 08:37

ABB hikes sales growth, EBIT-margin targets as demand seen continuing UPDATE
Date : 05/09/2007 @ 08:31
Source : TFN


ABB hikes sales growth, EBIT-margin targets as demand seen continuing UPDATE


(Updating with divisional details, global market growth)
ZURICH (Thomson Financial) - ABB Ltd has hiked its annual organic sales
growth target for the period 2007-2011 to 8-11 pct, from 5 pct, saying it
expects continuing demand for new and upgraded power infrastructure and further
investments in productivity and energy efficiency.
In parallel, the Swedish-Swiss engineering group increased its EBIT-margin
target range to 11-16 pct, from 'above 10 pct'.
Analysts had expected the group to announce in today's strategy review a new
annual organic sales growth target of 6-8 pct, and EBIT-margin target of 13-16
pct.
The old targets, which were originally valid through to 2009, had already
been exceeded.
"The top of our margin corridor reflects our ambition assuming our
end-markets remain favourable, while the bottom is what we believe we can
deliver in a more challenging market environment," CFO Michel Demare commented.
ABB also said it expects EPS to grow in a range of 15-20 pct, while it
forecasts its after-tax return-on-capital-employed (ROCE) to exceed 30 pct over
the period.
No new guidance for the net profit-margin was given.
ABB also said that it expects its markets to grow on average by
approximately 6 pct a year from 2007, while global GDP is forecasted to reach
about 3 pct on average, driven by strong growth from Asia.
The company said it expects to maintain its current core portfolio of
businesses and aim to build on its leading technology and strong market
positions, especially in the fast-growing emerging economies.
"ABB's market and technology leadership in highly attractive businesses
provides and opportunity to achieve sustainable organic growth and increased
profitability," said ABB chief executive and president Fred Kindle.
Commenting on potential acquisitions, Kindle said that ABB will continue to
"look for value-creating external growth opportunities".
In parallel, the engineering group also announced targets for its five
divisions, with Power Products seen reaching organic sales growth of 10 pct and
an EBIT margin of 12-17 pct.
Its Power Systems unit is forecasted to grow sales by 11 pct, with the EBIT
margin seen at 6-10 pct, and Automation Products is expected to achieve sales
growth of 8 pct and an EBIT margin of 14-19 pct.
The Process Automation unit is forecasted to grow sales by 8 pct, with the
EBIT margin between 9-14 pct, and in Robotics sales are forecast to grow 6 pct
and the EBIT margin to reach 5-10 pct.
[e-mail]
at/lam

[waldron] 05/9/2007 08:04

Swiss shares TFN at a glance outlook
Date : 05/09/2007 @ 07:59
Source : TFN


Swiss shares TFN at a glance outlook


ZURICH (Thomson Financial) - Share prices are expected to open slightly
lower, with the SMI digesting recent gains and reflecting a dearth of major
corporate news, traders said.
In pre-bourse trading, the Swiss Market Index was 5.63 points lower at
8,960.72.
Yesterday, the Swiss Market Index closed 1 pct or 88.55 points higher at
8,966.35 and the Swiss Performance Index was up 69.39 points at 7,7302.63.

FORTHCOMING EVENTS
TODAY

TOMORROW
-Baloise H1 results
-Swiss August unemployment

TODAY'S PRESS
-none

COMPANY NEWS
-Adval-Tech posts much-improved H1 results, outlook positive
-ABB hikes sales growth, EBIT-margin targets as demand seen continuing
-ABB sees EPS growth of 15-20 pct through to 2011
-ABB hikes EBIT target range to 11-16 pct through to 2011
-ABB sees FY annual sales growth of 8-11 pct through to 2011
-Novartis' hospital bug drug Cubicin gains EU approval for two new
indications
-Ascom H1 disappoints, prompts group to step up strategic efforts
-Ascom sees 10 pct ebit margin in 2010
-Ascom H1 sales 264.1 mln sfr
-Ascom H1 EBIT 2.4 mln sfr
-Ascom H1 net 1.1 mln sfr

MACROECONOMIC NEWS
-none

MARKET SENTIMENT
-Credit Suisse, Deutsche Bank cut to 'equal-weight' at Lehman Brothers
[e-mail]
at/jag

[waldron] 05/9/2007 07:35

ABB hikes sales growth, EBIT-margin targets as demand seen continuing UPDATE
Date : 05/09/2007 @ 07:31
Source : TFN


ABB hikes sales growth, EBIT-margin targets as demand seen continuing UPDATE


(Updating with CFO, CEO comments on new targets, strategy, acquisitions)
ZURICH (Thomson Financial) - ABB Ltd has hiked its annual organic sales
growth target for the period 2007-2011 to 8-11 pct, from 5 pct, saying it
expects continuing demand for new and upgraded power infrastructure and further
investments in productivity and energy efficiency.
In parallel, the Swedish-Swiss engineering group increased its EBIT-margin
target range to 11-16 pct, from 'above 10 pct'.
Analysts had expected the group to announce in today's strategy review a new
annual organic sales growth target of 6-8 pct, and EBIT-margin target of 13-16
pct.
The old targets, which were originally valid through to 2009, had already
been exceeded.
"The top of our margin corridor reflects our ambition assuming our
end-markets remain favourable, while the bottom is what we believe we can
deliver in a more challenging market environment," CFO Michel Demare commented.
ABB also said it expects EPS to grow in a range of 15-20 pct, while it
forecasts its after-tax return-on-capital-employed (ROCE) to exceed 30 pct over
the period.
No new guidance for the net profit-margin was given.
ABB said it expects to maintain its current core portfolio of businesses and
aim to build on its leading technology and strong market positions, especially
in the fast-growing emerging economies.
"ABB's market and technology leadership in highly attractive businesses
provides and opportunity to achieve sustainable organic growth and increased
profitability," said ABB chief executive and president Fred Kindle.
Commenting on potential acquisitions, Kindle said that ABB will continue to
"look for value-creating external growth opportunities".
[e-mail]
at/lam/at/slj

[waldron] 05/9/2007 07:10

ABB hikes organic sales growth, EBIT-margin targets as demand seen continuing
Date : 05/09/2007 @ 07:06
Source : TFN


ABB hikes organic sales growth, EBIT-margin targets as demand seen continuing


ZURICH (Thomson Financial) - ABB Ltd has hiked its organic sales growth
target for the period 2007-2011 to 8-11 pct, from previously 5 pct, saying it
expects continuing demand for new and upgraded power infrastructure and further
investments in productivity and energy efficiency.
In parallel, the Swedish-Swiss engineering group increased its EBIT-margin
target range to 11-16 pct, from 'above 10 pct'.
Analysts had expected the group to announce in today's strategy review a new
organic sales growth target of 6-8 pct, and EBIT-margin target of 13-16 pct.
The old targets, which were valid through to 2009, had already been
exceeded.
ABB also said it expects EPS to grow in a range of 15-20 pct, while it
forecasts its after-tax return on capital employed (ROCE) to exceed 30 pct over
the period.
[e-mail]
at/lam

[waldron] 05/9/2007 07:03

ABB Targets 2011


RNS Number:3194D
ABB Ltd
05 September 2007


ABB expects sustained growth and increased earnings from 2007 to 2011

Zurich, Switzerland, Sept. 5, 2007 - ABB, the leading power and automation
technology company, expects sustained revenue growth and increased profitability
under its new mid-term strategy for 2007 to 2011.

ABB expects demand for new and upgraded power infrastructure to continue in all
regions, and further industrial investments in improved productivity and energy
efficiency. The company plans to maintain its current core portfolio of
businesses and aims to build on its leading technology and strong market
positions - especially in the fast-growing emerging economies - to increase
revenues organically at almost twice the rate of market growth and three times
the rate of global GDP growth over the period.

Assuming demand remains favorable, ABB expects profitability (measured as
earnings before interest and taxes as a percentage of revenues) to increase by
as much as five percentage points during the five-year period, compared to 2006.
The improvement will be driven by economies of scale, such as strong factory
loading, and further operational improvements.

As a result, the company forecasts earnings per share to grow by a compound
average of 15-20 percent a year over the planning period and its return on
capital employed, after tax, to exceed 30 percent by 2011.

"ABB's market and technology leadership in highly attractive businesses provides
an opportunity to achieve sustainable organic growth and increased
profitability," said Fred Kindle, ABB President and CEO.

"We will continue our focus on business execution and operational excellence,"
Kindle said. "Initiatives to optimize our global footprint will continue to
bring both cost and growth benefits. At the same time, we will look for
value-creating external growth opportunities. We expect our shareholders as well
as our other constituencies to directly benefit from this strategy."

Summary of 2007-11 Group targets(1)
Revenue growth 8-11% CAGR(2)
------------------------------- --------------
EBIT margin corridor 11-16%
------------------------------- --------------
Earnings per share growth 15-20% CAGR(2)
------------------------------- --------------
Return on capital employed (after tax) (ROCE) > 30% by 2011
------------------------------- --------------
Free cash flow as share of net income (cash conversion) 100% on average
------------------------------- --------------

(1) Targets are defined in Appendix I of this release. (2)Compound annual growth
rate over five years from 2007 to 2011 (i.e., base year is 2006), excluding
major acquisitions and divestitures and assuming constant exchange rates.

The previous EBIT margin target, which was to be achieved by the end of 2009,
has been replaced with an EBIT margin corridor providing a minimum and maximum
value for each year in the 2007-11 period, depending on market conditions. The
previous net margin target has been replaced by a compound annual growth target
for undiluted earnings per share.

"The top of our margin corridor reflects our ambition assuming our end-markets
remain favorable, while the bottom is what we believe we can deliver in a more
challenging market environment," said Michel Demare, Chief Financial Officer.
"Our aim with the new EPS growth goal is to bring our targets even more in line
with the most widely used valuation measures in the investment community."


The company said its existing portfolio of power and automation businesses, and
its leading presence in high-growth emerging markets, puts it in a strong
position to benefit from expected continuing growth in power utility and
industrial automation investments over the next five years. These favorable
trends will be further enhanced by the accelerating drive for energy efficiency
and efforts to combat climate change.

From 2007 to 2011, global GDP is expected to grow by an average of about 3
percent a year, while ABB forecasts that its markets will grow at approximately
6 percent a year. The Asian market is expected to grow by more than 50 percent
by 2011, with Europe up 24 percent, the Americas 25 percent, and the Middle East
and Africa 40 percent higher.

ABB continues to assess potential acquisitions that fill technology or regional
gaps, create strategic and financial value and can be successfully integrated.
Taking possible acquisition financing into account, ABB aims for a maximum
balance sheet gearing (total debt divided by total debt plus equity, including
minority interest) of 40 percent. The company's growth and profitability targets
exclude the effect of major acquisitions.

ABB also published revenue growth and EBIT margin targets for each of its five
divisions. The growth targets range from 6 percent in Robotics to 11 percent in
Power Systems. The upper end of the divisional EBIT margin corridors range from
10 percent in Robotics and Power Systems to 19 percent in Automation Products.

Division targets
Division Revenue growth* EBIT margin corridor
2007-11 CAGR(2)
--------------- --------------- ---------------------
Power Products 10% 12-17%
--------------- --------------- ---------------------
Power Systems 11% 6-10%
--------------- --------------- ---------------------
Automation Products 8% 14-19%
--------------- --------------- ---------------------
Process Automation 8% 9-14%
--------------- --------------- ---------------------
Robotics 6% 5-10%
--------------------------------------------------------------------------------
* Compound annual growth rate for the five years from 2007 to 2011 (i.e., base
year is 2006), excluding major acquisitions and divestitures and assuming
constant exchange rates.

Investments in technology and R&D will continue to be a pillar of ABB's
strategy. In addition, the company has identified a number of large industrial
customer segments, such as rail transportation, wind energy and water, where it
has a wide offering of relevant products and services but where it has not yet
tapped the full business potential. Revenue from these end markets is expected
to grow faster than the group average in the next several years.

ABB will continue to drive its global footprint initiative aimed at aligning the
geographic scope of its engineering, manufacturing and supply to rapidly
changing market conditions. The company said it had increased sourcing from
emerging economies to more than 30 percent of total sourcing by the end of the
first half of 2007 compared to under 18 percent in 2005, and that low-cost
sourcing can increase further.

Included in ABB's 2011 strategy are further initiatives to achieve leadership in
business ethics, people development and occupational health and safety.

ABB (www.abb.com) is a leader in power and automation technologies that enable
utility and industry customers to improve performance while lowering
environmental impact. The ABB Group of companies operates in around 100
countries and employs about 111,000 people.


More information

(image001)ABB's mid-term targets press release and presentation slides are
available from Sept. 5, 2007 on the ABB News Center at www.abb.com/news and on
the Investor Relations homepage at www.abb.com/investorrelations.

ABB will host a press conference and conference call for journalists, which will
also be Webcast, starting at 10:00 a.m. Central European Time (CET) today.
Callers from the UK should dial [phone]. From Sweden, dial +46 8 5069
2105, and from the rest of Europe, please dial [phone]. Lines will be
open 15 minutes before the start of the conference. The audio playback of the
conference call will start one hour after the end of the call and be available
for 72 hours: Playback numbers: [phone] (U.K.), [phone] (rest
of Europe) or [phone] (U.S./Canada). The code is 306, followed by the #
key.

A meeting, conference call and live Webcast for analysts and investors is
scheduled to begin today at 2:00 p.m. CET (8:00 a.m. EST). Callers should dial
[phone] (from the U.S./Canada) or [phone] (Europe and the rest
of the world). Callers are requested to phone in ten minutes before the start of
the conference call. The audio playback of the conference call will start one
hour after the end of the call and be available for two weeks. Playback numbers:
[phone] (U.S./Canada) or [phone] (Europe and the rest of the
world). The code is 299, followed by the # key.

Important notice about forward-looking information

This press release includes forward-looking information and statements including
statements concerning the outlook and targets for our businesses. These
statements are based on current expectations, estimates and projections about
the factors that may affect our future performance, including the economic
conditions of the regions and industries that are major markets for ABB. These
expectations, estimates and projections are generally identifiable by statements
containing words such as "aims," "expects," "believes," "estimates," "targets,"
"plans" or similar expressions. However, there are many risks and uncertainties,
many of which are beyond our control, that could cause our actual results to
differ materially from the forward-looking information and statements made in
this press release and which could affect our ability to achieve any or all of
our stated targets. The important factors that could cause such differences
include, among others, the amount of revenues we are able to generate from order
backlogs and orders received, raw materials prices, market acceptance of new
products and services, changes in governmental regulations and costs associated
with compliance activities, interest rates, fluctuations in currency exchange
rates and such other factors as may be discussed from time to time in ABB's
filings with the U.S. Securities and Exchange Commission, including its Annual
Reports on Form 20-F. Although ABB Ltd believes that its expectations reflected
in any such forward-looking statement are based upon reasonable assumptions, it
can give no assurance that those expectations will be achieved.

For more information, please contact;

Media Relations:
Thomas Schmidt, Wolfram Eberhardt
(Zurich, Switzerland)
Tel: [phone]
Fax: [phone]
[e-mail]

Investor Relations:
Switzerland: Tel. [phone]
Sweden: Tel. [phone]
USA: Tel. [phone]
[e-mail]

ABB Ltd
Affolternstrasse 44
CH-8050 Zurich, Switzerland




Appendix I
Target definitions


Revenue growth CAGR Compound annual growth rate of revenues for the five years
------------------- from 2007 to 2011 (i.e., starting point = 2006), excluding
major acquisitions and divestitures and assuming constant
exchange rates
------------------------------
EBIT margin corridor The minimum and maximum earnings before interest and taxes
------------------- as a percentage of revenues expected for each year within
the period 2007 to 2011
------------------------------
EPS growth Compound annual growth rate of earnings per share
------------------- (undiluted) from 2007 to 2011 (i.e., starting point = 2006)
------------------------------
Cash conversion Free cash flow (cash flow from operating activities
------------------- adjusted for changes in financing receivables as well as
net investments in property, plant and equipment) as a
percentage of net income
------------------------------
Return on capital EBIT (less tax), divided by the sum of fixed assets plus
employed net working capital (at year end)
EBIT (less tax) = EBIT x (1 - tax rate)
Tax rate = Provision for taxes / Income from continuing
------------------- operations before taxes and minority interest
------------------------------




This information is provided by RNS
The company news service from the London Stock Exchange

END
TSTSSMSMISWSEDU

[waldron] 05/9/2007 04:29

ABB May Opt for Big Purchase, Spurning Calls for Cash Return

By Antonio Ligi

Sept. 5 (Bloomberg) -- ABB Ltd. Chief Executive Officer Fred Kindle may be ready to make a big acquisition after returning the world's largest electrical-grid maker to profitability and amassing more than $2 billion in cash.

That might be a big mistake, said Thomas Lusetti, a Zurich- based fund manager at VP Bank AG who helps manage the equivalent of $26 billion including ABB.

``I would like a share buyback a lot more,'' Lusetti said. ``There are shareholders who stood by during the difficult times. They certainly would appreciate a biscuit in the form of an increased dividend.''

Kindle, 48, has increasingly hinted that he's leaning toward a takeover of ``many billions.'' He's promised not to repeat the mistakes of the 1990s, when ABB snapped up more than 200 companies during a spending spree that pushed it close to bankruptcy. Asbestos claims also contributed to the financial crisis. Of 28 analysts surveyed by Bloomberg, 22 rate the shares ``buy.'' That may change if investors don't like what Kindle has to say when he updates them on his strategy today in Zurich.

``ABB has a very bad track record in acquisitions,'' said Panagiotis Spiliopoulos, an analyst at Bank Vontobel in Zurich who has a ``buy'' rating on the stock. ``Kindle should wait. It isn't the right time yet.''

ABB shares have more than tripled since the company's last major purchase in September 2001, outpacing Munich-based Siemens AG, Europe's largest engineering company. That's given ABB a market value of 68.4 billion francs ($56.5 billion).

Dividend Yield

Under Kindle, ABB has posted a profit the past two years after four years of losses. The company had net cash of $2.4 billion as of June 30. A recent disposal may increase that by almost $1 billion and one analyst said the company may have $8.6 billion in cash, including a possible share issue, by the end of 2007.

In 2006, ABB was able to pay a dividend for the first time in five years. Its dividend of 24 cents a share paid out this year is one-sixth of Siemens's.

``The dividend yield isn't big,'' said Dieter Buchholz, a fund manager who helps oversee $107 billion at AIG Private Bank Ltd. in Zurich including ABB shares. ``They could do more.''

ABB's dividend yield is 0.81 percent, compared with St. Louis-based Emerson Electric Co., the world's largest maker of power equipment for oil companies, at 2.12 percent, and France's Schneider Electric SA, the world's biggest maker of circuit breakers, at 3.03 percent, according to Bloomberg data.

Dividend yield is used to evaluate return on a stock excluding the effect of price appreciation.

Final Milestone

Formed in 1988 through the merger of BBC Brown Boveri of Switzerland and ASEA AB of Sweden, ABB makes components and systems to transmit and distribute electricity, motors and generators as well as robots. Its workforce has shrunk to about 111,000 from a peak of 219,000 in mid-1998 as units including paper-making equipment and water treatment were jettisoned.

``A look at the past shows that they bought too much and too fast,'' Buchholz said. ``To invest in their own business is better. Big acquisitions are always difficult to integrate.''

ABB on Aug. 27 agreed to sell its U.S.-based Lummus Global energy services' unit to Chicago Bridge & Iron Co. for $950 million, capping six years of divestitures.

Kindle, who took over in January 2005, called the transaction the ``final milestone'' of ABB's strategy of selling units to focus on power and automation technology.

Proceeds from the deal will add to ABB's cash holdings, which Gerard Moore of Societe General estimates may reach as much as $8.6 billion by the end of 2007. In May, investors approved a proposal to increase the share capital by a maximum of 200 million shares with a par value of 2.5 francs each. The sale must take place no later than May 3, 2009.

Asbestos Action

Lummus Global was the last of ABB's divisions to be sold that had been weighed down with asbestos-related claims that almost sank the company in 2002. The unit had filed for bankruptcy in 2006 to resolve remaining asbestos actions.

Another U.S. unit, Combustion Engineering, was the target of more than 430,000 lawsuits by claimants who said their health was impaired by exposure to asbestos from its boilers. ABB resolved the bulk of those claims last year with a $1.43 billion settlement plan.

After shedding Lummus, ABB should have almost $3.4 billion in net cash, said analyst Alessandro Migliorini of Pictet & Cie.'s Helvea SA brokerage unit in Geneva. That will increase to more than $4.5 billion by years' end, he said.

``We expect the company to provide an indication of whether it will retain the cash pile for potential acquisitions, or start making share buybacks,'' said Migliorini, who rates ABB ``neutral.''

A buyback would help sustain an already ``pretty high share price,'' Lusetti said.

Potential Targets

ABB's shares, which closed at 29.88 francs on the Swiss Stock Exchange yesterday in Zurich, trade at an estimated price- earnings ratio of 22.22. That compares with Emerson Electric at 18.90 and Schneider Electric SA at 14.87, according to Bloomberg data.

Some analysts, including Societe General's Moore, say acquisitions will add more shareholder value than a buyback.

``The key issue for the shares to continue outperform is the ability to use its fast-expanding net cash position to make accretive acquisitions,'' Paris-based Moore wrote in a research note. He has a ``hold'' rating on the stock.

ABB last spent more than $1 billion on a takeover eight years ago when it bought Elsag Bailey Process Automation NV for $2.1 billion from Finmeccanica SpA.

France's Legrand SA and Milwaukee-based Rockwell Automation Inc. are now Kindle's main potential targets, Moore wrote.

Too Expensive

Legrand, the world's biggest maker of switches and plugs for homes and offices, has a market value of 7 billion euros ($9.53 billion) while Rockwell, a maker of factory automation equipment, is valued at $10.9 billion.

ABB would benefit from Limoges-based Legrand's strength in the ``highly'' profitable ultra-low voltage market, Moore said. Rockwell would fit as well because ABB is rather ``weak'' in automation sales in the U.S., where it gets 14 percent of its revenue.

Mark Troman, a Merrill Lynch & Co. analyst in London who has a ``buy'' rating on ABB, wrote in a May 29 note that a purchase of Legrand or Rockwell is ``unlikely'' because they are too costly.

Kindle has said several times that he's targeting companies for ABB's automation and power-products units, and that the most attractive markets are Asia and North America.

Spiliopoulos said a buyback announcement by Kindle is unlikely ``as acquisition opportunities may still arise.''

``I don't think they should prove that they can do a big acquisition,'' he said. ``Legrand and Rockwell aren't running away. I think they will do some smaller acquisitions and, rather later, a share buyback.''

To contact the reporter on this story: Antonio Ligi in Zurich at [e-mail] .

Last Updated: September 4, 2007 18:10 EDT

[waldron] 04/9/2007 09:41

ABB wins 30 mln usd contract to equip new commuter train fleet in Paris
Date : 04/09/2007 @ 09:39
Source : TFN


ABB wins 30 mln usd contract to equip new commuter train fleet in Paris


ZURICH (Thomson Financial) - ABB Ltd said it has signed a contract with
Bombardier worth more than 30 mln usd to supply traction transformers for 172
new trains that will upgrade commuter travel in the heavily congested
Ile-de-France region around Paris.
The Swedish-Swiss engineering group said the order was already booked in the
second quarter of 2007.
The group expects follow-up order in future, a spokesman for the group said.
[e-mail]
jmt/bsd

[waldron] 03/9/2007 14:45

OUTLOOK ABB seen hiking EBIT margin guidance to 13-16 pct at strategy meeting
Date : 03/09/2007 @ 14:40
Source : TFN


OUTLOOK ABB seen hiking EBIT margin guidance to 13-16 pct at strategy meeting


ZURICH (Thomson Financial) - ABB LTD is expected to announce a new
EBIT-margin target of 13-16 pct during its strategy meeting on Wednesday when it
will announce its new financial targets until 2011.
Analysts expect the Swedish-Swiss engineering group to hike its organic
growth target to a range of between 6-8 pct, while the new net margin guidance
is seen at somewhere between 8.0-10.5 pct.
"ABB has reached two years in advance most of its 2009 financial targets. We
expect it will upgrade most of them", said UBS analyst Christel Monot.
JP Morgan analyst Andreas Willi said he believes that "ABB will try to find
a balance between ambitious targets to challenge its businesses but also
recognising the cyclical risk inherent in giving a target for 2011 at this point
in the cycle."
The Swedish-Swiss engineering group's previous targets set until 2009 --
including an organic sales growth of 5 pct, an EBIT margin of above 10 pct and a
net profit margin of above 5 pct -- have already been exceeded.

[e-mail]
jmt/jlc

[waldron] 31/8/2007 11:19

ABB wins 20 mln usd million service contract in US
Date : 31/08/2007 @ 10:45
Source : TFN


ABB wins 20 mln usd million service contract in US


ZURICH (Thomson Financial) - ABB Ltd said it has been awarded a 20 mln usd
contract from ATC Panels to manage service activities at its Moncure facility in
North Carolina.
The agreement follows a similar 15 mln usd contract awarded in March
covering ATC's site in Pembroke, Ontario, the Swedish-Swiss engineering group
said.

[e-mail]
jmt/ejp