ABB-Powerful Forecast

ABB Ltd., the Swiss power technology company, has raised its outlook for the next five years, forecasting strong demand for new and upgraded power infrastructure in China, India and the Middle East.

The electrical engineering company is now targeting sales growth of between 8 percent and 11 percent. Operating profit, meanwhile, should rise at an annual rate of between 11 percent and 16 percent.

Both the figures are 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 amid a global infrastructure boom and investors had already priced in their forecasts.

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.

"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."

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, are really strong.

This also shows how much ABB has improved over the past few years. Importantly, ABB'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 $10 billion to sponsor a takeover.

A global economic downturn could still slow the company's growth, even though a feeling of rosiness prevails at present.

(Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints