ABB Posts $735 Million Net Profit for 2005 | Automation.com

ABB Posts $735 Million Net Profit for 2005

February 232006
  • Full-year EBIT more than $1.7 billion, EBIT margin at 7.8 percent
  • Cash flow from operations tops $1 billion for the year despite securitization effect
  • Net debt cut by 50 percent versus 2004
  • Board of Directors proposes dividend of CHF 0.12 per share

    Zurich, Switzerland, February 2006 – ABB's 2005 net income reached $735 million compared to a $35-million loss in 2004, with strong increases in orders, revenues and EBIT. Continuing market strength and further operational improvements in the fourth quarter of 2005 contributed to the strong result.

    "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 EBIT.

    "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," Kindle said.

    The Power Technologies division reported a 64-percent increase in EBIT in the fourth quarter, in spite of $43 million in charges related to the previously announced transformer consolidation program. The Automation Technologies division increased EBIT by 25 percent in the quarter, reflecting further operational improvements. Positive EBIT in Non-core activities and lower Corporate costs also contributed to the profit improvement for both the quarter and the full year, and helped the company meet its 2005 targets.

    Net income was $222 million in the fourth quarter, despite a $72-million expense in discontinued operations for the revaluation of ABB shares reserved to cover part of the company's asbestos liabilities. Cash flow from operating activities topped $1 billion for the full year, even after a negative impact of approximately $600 million resulting from reduced securitization and from discretionary pension contributions.

    ABB cut net debt to approximately $500 million at December 31, 2005, from more than $1 billion at the end of 2004. ABB also reduced its unfunded pension liabilities by approximately $600 million, to $839 million at the end of December, and its outstanding securitization by $600 million, to $320 million.

    For full report visit www.abb.us/global/seitp/seitp202.nsf/0/9aae05b34ebb3e39c12571090054b00c!OpenDocument .
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