Clinging on

23 October 2008 By Una Galani Follow @ugalani

Large orders are falling and expansion plans under review. Yet Swiss engineer ABB and French electrical group Schneider are clinging to their optimistic forecasts. Rapid share price declines show shareholders don t believe them. They know what global recessions do to profits.

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Swiss engineering group ABB on Thursday reported thirdquarter results below expectations. The company said that it was too early assess the shortterm impact of the financial crisis, but confirmed its 2008 outlook. ABB shares have fallen 55% this year.

As large project orders declined significantly, ABB's orders were down 22% quarter on quarter. Overall operating profit shrunk to $1.3bn including a $100m oneoff hedging charge, compared to $1.4bn in the previous quarter.

Earlier this week, French electrical group Schneider said it would not make acquisitions above E100m within the next 6 months. It now expects 8% sales growth in 2008, towards the lower end of its guidance. Schneider shares have fallen 54% this year.

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