* Q4 orders rise 4 pct to $10.5 bln vs $9.8 bln f'cast
* Net falls 27 pct to $604 mln after $350 mln charge
* Analysts had forecast net profit of $532 mln
* Says questions remain about growth in US, Europe
* Shares rise more than 4 pct, outperform sector
(Adds details, analyst quote, shares)
By Caroline Copley
ZURICH, Feb 14 Switzerland's ABB Ltd
beat forecasts for net profit and order intake and said business
was improving in China, sending its shares to their highest in a
year and a half.
The world's biggest supplier of industrial motors and power
grids, sensitive to cyclical swings in the global economy, said
it would focus on cutting costs to offset near-term uncertainty
about growth in Europe and the United States.
However Chief Executive Joe Hogan was more upbeat about
China, contrasting with comments from German rival Siemens AG
which said last month it did not expect the global
economy to provide any tailwinds this year, with weakness in
China and recession in the euro zone dragging on demand.
Hogan said demand in China grew 10 percent in the fourth
quarter across almost all of ABB's units, making him optimistic
for the year as a whole.
"ABB shows clearly a better business development than some
European competitors," said Christoph Ladner, an analyst at
brokerage Kepler Capital Markets.
Hogan has sought to cut costs to combat a sluggish global
economy that has sapped demand for factory equipment and
prompted clients to postpone big capital expenditure projects.
He said in a video message ABB would have to carefully
balance costs against growth prospects and would cap capital
investment growth at around the inflation rate, after spending
grew almost 70 percent over the past three years.
Shares in ABB, which trade at 14.5 times estimated 2013
earnings compared with 13.6 times for Siemens and 13.4 times for
French competitor Schneider, were up 4.3 percent by
0847 GMT, against a 0.2 percent firmer European sector.
The stock rose as high as 20.75 francs, its highest since
Tough price competition in Asia, uncertainty over wind farms
and a backlog of low-margin orders weighed on ABB's two power
units in 2012.
The company said in December it would be more selective
about projects in its power systems unit in an attempt to make
the division more profitable.
It is also concentrating on consolidating acquisitions from
a spending spree over the past few years. Orders have been
supported by electrical-components maker Thomas & Betts, which
ABB bought in 2012 for $3.9 billion to boost exposure to North
Despite the global weakness in the fourth quarter, orders at
ABB rose 4 percent to $10.5 billion, with a 41 percent jump in
orders from the Americas offsetting a 25 percent drop in Asia.
That beat the average estimate of $9.8 billion in a Reuters poll
Its order backlog at the end of December rose 7 percent from
a year earlier to $29.3 billion.
Fourth-quarter net profit fell 27 percent to $604 million,
hit by a $350 million charge, flagged in December, to revamp its
power systems unit. Analysts in a Reuters poll had forecast
profit of $532 million.
The company, which also makes components for the oil and gas
industry, said it was targeting cost savings and productivity
improvements equivalent to 3 percent to 5 percent of cost sales
every year. It cut costs by $1.1 billion in 2012.
It said it would pay a dividend of 0.68 francs per share
compared with 0.65 francs a year earlier.
(Editing by Chris Gallagher and David Holmes)