ABB Group Results - First Nine Months 1999 -- ABB Earnings Growth Continues in First Nine Months.

ZURICH, Switzerland--(BUSINESS WIRE)--Oct. 19, 1999--

-- Operating earnings at $ 1,747 million, up 33 percent

-- Revenues up 9 percent

-- Orders up 3 percent, 6 percent in local currencies

ABB, the globalized technology and engineering group, today reported double-digit earnings growth for the first nine months, with operating earnings after depreciation up 33 percent from the year before to $ 1,747 million (1998: $ 1,312 million). Orders received showed significant growth in the third quarter compared to the year before, led by Automation, Power Distribution and Oil, Gas and Petrochemicals.

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US$ in millions unless otherwise stated

                       Jan.-Sep.    Jan.-Sep.     Percentage
                         1999         1998        change (a)

    Orders Received     18,936       18,411           + 3%
    Revenues            17,779       16,304           + 9%
    Operating Earnings
     after Depreciation  1,747        1,312           + 33%
    Net Income           1,108          849           + 31%
    Net Income per Share
     (US$)                3.69         2.83           + 31%
    --------------------------------------------------- --------------

(a) In local currencies, orders, revenues and earnings are
    approximately 3 percent higher.

     "Third quarter orders are up 11 percent compared to the third
quarter last year in a mixed market,"  said ABB President and CEO,
Goran Lindahl.  "As the market strengthens, and as we build our
positions in higher growth businesses like automation, we are in a
good position to see results improve further."  For the remainder of
1999, Mr.  Lindahl reconfirmed ABB's earlier outlook that 1999
revenues, as well as operating earnings excluding capital gains from
the transfer of the power generation businesses, are expected to
increase compared to 1998.
     The transfer of most of ABB's power generation businesses to the
new joint venture ABB ALSTOM POWER resulted in a net capital gain of
$ 162 million after taxes ($ 262 million in operating earnings) for
the first nine months, including an additional gain taken in the
third quarter.  ABB's 50-percent share in the ordinary income before
taxes of ABB ALSTOM POWER is break even.
     Orders received increased by 3 percent to $ 18,936 million (1998:
$ 18,411 million1).  Expressed in local currencies, order growth was
6 percent compared to the same period in the previous year.  The
Power Transmission segment booked several large orders.  However,
overall orders received in this segment were slightly down.  Power
Distribution orders increased sharply supported by demand in
deregulated markets.  Automation orders were up substantially as a
result of higher demand in the automotive, petrochemical and consumer
goods sectors and as a consequence of the acquisition of Elsag Bailey
Process Automation.  Oil, Gas and Petrochemicals regained momentum by
posting its strongest quarter over the past year.  Significant orders
were won in several regions.  The gap to last year's order level has
been significantly reduced.  However, this segment's full-year orders
are still not expected to reach the record 1998 level.  Orders
received for Products and Contracting were 2 percent higher.
     In major markets, several lead indicators are showing positive
signs and ABB's overall European orders were up 2 percent.  Expressed
in local currencies, these orders increased 5 percent.  Demand was
mixed in the Americas.  Deregulation continued to be a prime driver,
while low commodity prices in various sectors hampered demand.
Although orders for the Americas were slightly lower, a strong third
quarter helped to further close the gap to 1998 that was reported
after six months.  Asian demand rebounded compared to the previous
year as orders increased 36 percent.  Orders in the Middle East and
Africa almost equaled the high level of last year.
     The order backlog increased to $ 15,847 million at the end of
September, up 6 percent compared to the previous yearend (December
31, 1998: $ 14,934 million).  Base orders for the first nine months,
representing some 80 percent of ABB Group's total orders, increased 3
percent (6 percent in local currencies) over the same period last
year.
     Revenue growth for the Group continued its momentum with an
increase of 9 percent to $ 17,779 million (1998: $ 16,304 million).
All regions and industrial segments contributed higher revenues.
     Operating earnings for the Group increased 33 percent to $ 1,747
million (1998: $ 1,312 million).  Almost all segments reported
increased earnings.  Power Transmission, Power Distribution and
Products and Contracting all increased their operating earnings by
double digits following an improvement in margins and a successful
adjustment of the cost base during the previous quarters.  In spite
of the costs of integrating the Elsag Bailey acquisition,
Automation's earnings reached almost the same level as last year.
Since the acquisition, the integration has resulted in a gross
reduction of approximately 2,100 jobs, mostly in overhead and
administration, as well as enhanced productivity measures.  Earnings
for Oil, Gas and Petrochemicals stabilized on last year's level and
Financial Services' earnings reached the same high level as last
year.
     On June 30, 1999, ABB ALSTOM POWER was formed as a joint venture
by ABB and ALSTOM.  This created the world's leading power generation
service and equipment supplier, with pro-forma revenues in 1998 of
some $ 11 billion.  At its inception, the parents asked for a
thorough review of the business, in order to realign the accounting
principles and to reach joint risk assessment methods in the
interests of protecting the future success of the newly created
company.  This was completed during the third quarter of 1999, the
joint company`s first quarter of operation.  As part of the review,
ABB ALSTOM POWER took one-time costs and provisions for project
risks, quality and cost overruns in its income statement.
Accordingly, ABB fully charged 50 percent of this amount to its
income statement.  However, ABB's earnings and net cash position are
not negatively affected by these costs.  ABB ALSTOM POWER's ordinary
result during the first quarter of operation was break-even.
     Including the restructuring provision, which was set up in the
opening balance sheet, the company is well-positioned to reach its
longer-term goal of 7-8 percent earnings margin before tax.  During
the year 2000, ABB ALSTOM POWER expects to reach a pre-tax margin in
the range of 3-4 percent.  The company continues to expect synergies
of euro 500-600 million from year four after its formation onwards.
     ABB's net interest expense amounted to $ 225 million (1998: $ 210
million).  Income before taxes increased by 29 percent to $ 1,583
million (1998: $ 1,224 million).  Return on capital employed reached
18.3 percent (1998: 17.2 percent).
     Net income for the first nine months reached $ 1,108 million, an
increase of 31 percent compared to the previous year (1998: $ 849
million).  Excluding the gain related to the formation of ABB ALSTOM
POWER, net income increased by 11 percent.
     ABB's net cash position (cash and cash equivalents minus short-,
medium-, and long-term loans) at September 30 was minus $ 499 million
(June 30, 1999: minus $ 625 million).  The Group's focus on working
capital management led to a substantially improved net operating cash
flow of $ 493 million (1998: $ 227 million).  As a consequence, the
corresponding cash earnings per share (CEPS) increased significantly.
     The number of employees at September 30, 1999, was 169,189 people
compared to 199,232 as reported at December 31, 1998. Adjusted for
acquisitions and divestitures, the number of permanent employees
decreased by 3 percent. Personnel expenses as a percent of revenue
continued to decrease and contributed to a further improvement in
margins.
     ABB's extensive Y2k preparation program, in close cooperation
with its customers, is near completion.  ABB will support its
customers at the millennium shift by offering a worldwide call-center
service that connects them, if needed, to the appropriate product or
system specialist level.  This service will be based on advanced
computer tools, ABB's worldwide corporate network and Internet
technology.  The review of ABB's internal systems is on schedule to
be completed by the end of October.  ABB has worked closely with
critical suppliers to verify their readiness for Y2k.
     ABB reiterates its full-year forecast that general demand for
ABB's products and systems will improve as of mid-2000.  Full-year
1999 revenues, as well as operating earnings excluding the capital
gain from the formation of ABB ALSTOM POWER, are expected to increase
compared to 1998.

Full text can be read at website (www.abb.com)


1 Note: Unless stated otherwise, all references to 1998 figures refer
  to the first nine months. As described in the Notes to the Financial
  Statements, pro forma 1998 figures are adjusted for the power
  generation businesses related to ABB ALSTOM POWER and the sale of
  ABB's share in Adtranz (see Note 1). 1999 figures include Elsag
  Bailey Process Automation acquired in January 1999.