ZURICH (Reuters) - Swiss engineering group ABB posted a bigger-than-expected rise in third-quarter orders, helped by demand from the oil and gas industries, but said the outlook for the global economy was increasingly uncertain.
The Zurich-based firm showed encouraging signs of increased order momentum at the end of the second quarter, helped by a pick-up in large contracts worth over $15 million.
That trend appeared to have continued into the third quarter, when orders rose 24 percent to $11.2 billion, beating the average estimate in a Reuters poll for $10.1 billion (9.3 billion pounds).
Orders were boosted by larger contracts - representing a quarter of the total - including an $800 million order for a subsea power link in Scotland. Service orders rose 10 percent.
But momentum for its smaller orders slowed, with quarterly growth of 3 percent compared to an increase of 9 percent in the second quarter, reflecting a gloomier outlook for the global economy.
“We will carefully manage costs and cash as the short-term outlook for the global economy is increasingly uncertain,” Chief Executive Ulrich Spiesshofer said in a statement.
ABB struck a more cautious tone in its outlook, saying slow growth in Europe, political tensions in various parts of the world and the Ebola health crisis in Africa could offset positive signs in the United States and growth in China.
Net profit fell 12 percent to $734 million, in line with the average forecast in a Reuters poll.
The results was dragged down by lower revenues and a weak performance in its troubled Power Systems unit, which has been beset by a series of costly delays to offshore wind and solar power projects.
Nonetheless, the division broke even in the third quarter suggesting ABB’s latest measures to fix the unit are bearing fruit.
Reporting by Caroline Copley; Editing by Miral Fahmy