Swiss engineering group ABB doubled its medium-term sales target on Wednesday and said it was looking for acquisitions as booming demand in the emerging market power sector fuels growth.
The group set itself a new average annual sales growth target of between 8 and 11 percent for the 2007-2011 period, around double the previous target, and said it aimed for an operating profit margin corridor of 11% to 16%.
Analysts had expected a sales growth target of around 8% and an earnings before interest and tax (EBIT) margin target of around 15%.
"The top of our margin corridor reflects our ambition assuming our end-markets remain favourable, while the bottom is what we believe we can deliver in a more challenging market environment," said Chief Financial Officer Michel Demare.
ABB, which sells equipment to utilities and to oil and gas companies, is benefiting from higher investment in ageing power transmission systems in the United States as well as demand for
power infrastructure in emerging countries such as China and India.
The group, which has continued to outperform its sector despite recent market turmoil, said it would continue to look at potential acquisitions that plug technology or regional gaps.
The company, which also supplies infrastructure and generators for alternative energy sources, had net cash of $2.4 billion at the end of June and some analysts say the group could spend between $10 billion and $15 billion on acquisitions.
The new goals replace ABB's previous medium-term average annual sales growth rate target of more than 5% and the EBIT margin target of more than 10 percent for the 2005-2009
period.