Q3 & 9 Mths Results - Double-Digit Earnings Growth

ABB LIMITED
21 October 1999


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

* Operating earnings at $1,747 million, up 33 percent
* Revenues up 9 percent
* Orders up 3 percent, 6 percent in local currencies

Zurich, Switzerland, October 19, 1999 - 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.


US$ in millions unless otherise stated

                                   Jan. - Sep.   Jan. - Sep.  Percentage
                                       1999       1998        change*)

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%

*) 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
million 1). 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 yeaf. 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. 

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 io
ABB ALSTOM POWER and the sale of ABB's share in Adranz (see Note l). 1999
figures include Elsag Bailey Process Automation acquired in January 1999.

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.

ABB Group
Consolidated Income Statement

(USD in millions)         Notes Year to date
                                January - September       July - September

                               1999*  1998*   1998**     1999*   1998*   1998* 
                                  pro forma   restated       pro forma  restated

Revenues                       17,779  16,304 21,123     6,001    5,607   7,398
Material expenses              -7,460  -6,990 -9,649    -2,657   -2,447  -3,428
Personnel expenses             -5,711  -5,405 -6,667    -1,884   -1,803  -2,208
Other expenses                 -2,911  -2,731 -3,544      -988     -927  -1,290
Changes in work in progress
and finished goods                327     624    830       113      125     136
Depreciation of fixed assets     -621    -526   -683      -202     -179    -232
Unusual tterns             7      344      36     29        63       -3      13
Operating Earnings after        1,747   1,312  1,439       446      373     389
 Depreciation

Earnings from the defined  9       51     125      -         -       14       -
power generation business(a)       -1      -2     -2         1       -1      -1
Earinings from equity      9
accounted companies (b)
Dividend income                     7       6      6         -        1       1
Interest income                   312     291    295       120      103     104
Interest expense                 -537    -501   -507      -184     -182    -184
Exchange differences                4      -7     -7        -5      -10     -11
Income before Taxes             1,583   1,224  1,224       378      298     298

Income taxes                     -459    -367   -367      -103      -84     -84
Net Income before Minority      1,124     857    857       275      214     214
Interests

Minority interests                -16      -8     -8        -6       -3      -3
Net Income                      1,108     849    849       269      211     211

Basic and diluted                3.69    2.83   2.83      0.90     0.70    0.70
earnings per share,
in USD c)

*) Refer to Notes 1,8 (relating to the exclusion of the defined power generation
   business) and 9 (relating to the exclusion of Adranz)
**) Refer to Notes 1 and 8
a) Reflects in 1999 the Income before Taxes of the defined power generation
   business up to the divestment of this business in June 1999 and in the 1998
   pro-forma column, the Income before Taxes from January-September.  Refer also
   to following Note b).
b) Includes ABB's 50% share in the income before Taxes of ABB ALSTOM POWER as
   from July 1, 1999 (refer to Note 9).
c) Calculation based on 300,002,358 registered shares.

Condensed Consolidiated Balance Sheet

    (USD in millions)        Notes     Sept 30, Sept. 30,  Dec 31,
                                       1999*    1998       1998
                                              restated**
    Assets
    Cash and cash eqivalents            7,632      7,776     7,790
    Other current assets               12,293     15,731    15,080
    Total current assets               19,925     23,507    22,870
    Fixed assets                       10,621      9,310     9,513
    Total Assets                       30,546     32,817    32,383

    Liabillties and Equity
    Current liabilities       -4       16,177     19,206    17,883
    Non-current liabilities    4        7,905      7,603     8,226
    Minority interests                    319        322       315
    Stockholders' equity                5,545      5,686     5,959
    Total liabilities and Equity       30,546     32,817    32,383

    *Refer to Notes, 1, 8 and 9 
    *Refer to Notes 1 and 8.

   Condensed Statement of Changes in Equity

   (USD in millions)                          Note  January - September

                                                     1999   1998

   Equity as of December 31,                         5,959  5,283
   previous year (1998 and 1997, respectively)
   Inclusion of ABB AB and ABB AG a)                    34
   Changes in accounting principles            2      -903    -19 b)
   and other items 
   Dividend payments c)                               -503   -460
   Translation differences                     5      -150     33
   Net income (9 months)                             1,108    849
   Equity as of September 30                         5,545  5,686

   a) Net assets of ABB AB and ABB AG other than their holdings in the ABB Group
      contributed to ABB Ltd at June 28, 1999, i.e. after pay-out of ordinary
      dividends to respective shareholders related to 1998 and a special
      dividend payment to ABB AG shareholders on June 25, 1999.

   b) Introduction of revised IAS 12 on Income Taxes.
   c) Exclusive of the special ABB AG dividend as mentioned in Note a).

ABB Group

Condensed Consolidated Statement of Cash Flows

(USD in millions)

                                                       Year to date
                                                    January - September
                                            1999*         1998*       1998**
                                                        pro forma    restated

Cash Flow from Operating Activities
Income before taxes a)                      1,532         1,099       1,224
Adjustments of earnings to operating cash    -230           339         278
Change in net working capital                -568          -943        -888
Taxes paid                                   -241          -268        -301
Net Cash Flow from Operating Activities       493           227         313

Cash Flow related to Investing Activities    -546          -642        -679

Cash Flow related to Fianancing Ativities      63         2,324       2,364

Effects of translation differences           -168           107         127
on cash and cash equivalents

Net Change in Cash and Cash Equivalents      -158          2,016      2,125

Cash and cash equivalents-beginning of year 7,790          5,320      5,651
Cash and cash equivalents-                  7,632          7,336      7,776
end of interim period

*)   Refer to Notes 1, 8 and 9.
**)  Refer to Notes 1 and 8
a)   Excludes the earnings from the defined power generation business of USD 51
     million in 1999 corresponding to the period January-June and USD 125
     million corresponding to January-September in the 1998 pro forma figures.

Selected Notes to the Consolidated Financial Statements

Note 1, General and Scope of Consolidation

The Group's accounting principles, based on International Accounting Standards
(IAS) and applied in the interim report for the first nine months of 1999, are
described in the 1998 year-end Financial Statements of ABB, except for the
introduction of revised IAS 19, Employee Benefits (refer to Note 2) The interim
report and notes are unaudited.

Changes in scope of consolidation 1999

The first nine months report 1999 reflects the scope of consolidation of ABB
Ltd, the new Group holding company established on June 28, 1999. Compared to
the previous year's scope of ABB Asea Brown Boveri Ltd, the former group
parents ABB AB and ABB AC, are included in the scope of consolidation of ABB
from June 28, 1999. The effects of this change are immaterial given that the
sole holdings of ABB AB and ABB AG were their 50-percent share in ABB Asea Brown
Boveri Ltd.  Further, the cash surplus contained in ABB AG was distributed to
its shareholders through a special dividend payment prior to the contribution
of ABB AG to the new group parent ABB Ltd.

As a consequence of the contribution of the ABB power generation business
(except nuclear, some renewable power and distributed power businesses)
hereinafter called 'the defined power generation business' on June 30, 1999 to
the newly created ABB ALSTOM POWER joint venture (refer to Note 9), the
following changes have been effected:

- The income Statement excludes the defined power generation business up to its
  transfer on June 30, 1999 from all positions except for Income before Taxes,
  Income taxes, Net Income before Minority interests and Net Income. From July
  1, 1999, ABB's 50-percent share of earnings in the newly formed ABB ALSTOM
  POWER are included in the caption 'Earnings from equity accounted companies'.

- The Balance Sheet at September 30, 1999 excludes all assets and liabilities of
  the defined power generation business and contains ABB's 50-pereent share in
  the consolidated equity of the newly created ABB ALSTOM POWER.

- The Statement of Cash Flows excludes all cash flows relating to the
  operations of the defined power generation business. Cash flows arising from
  the transfer of the defined power generation business to ABB ALSTOM POWER
  are included as investing activities.

1999 figures include operations from the Elsag Bailey Process Automation group
acquired in January 1999 (refer to Note 6).

Restatements of 1998 rejecting changes in scope of consolidation

Restatement of 1998
1998 figures are adjusted to reflect the sale of ABB's 50-percent participation
in Adtranz (refer to Note 8). As a consequence, all Adtranz related items in the
Income Statement (except for earnings) and Balance sheet, formerly included to
50 percent in the ABB Group figures, have been removed.

Pro forma 1998 
The column '1998 pro forma' in the Income Statement and Statenment of Cash
Flows represents the 1998 Group figures excluding both the defined power
generation business and ABB's 50-percent share in Adtranz sold in 1998 (except
as indicated in the pertinent footnotes),

Note 2, Introduction of Revised L4S 19 on Employee Benefits

ABB has adopted the revised IAS 19 as of January 1, 1999. Related transition
effects amounting to a total of USD 1,006 million have been directly reflected
in the Balance Sheet as pension liabilities. The transition effects represent
remainiing unamortized benefit obligations under the original IAS 19 and
reevaluations in connection with changes of actuarial assumptions under revised
IAS 19. The equivalent amount after consideration of deferred taxes - amounting
to USD 889 million - has been charged to equity as a change in accounting
principles (refer to Statement of Changes in Equity). The following is a summary
of main items considered at January 1, 1999 for the transition to the revised
IAS 19.

(USD in millions)

   Total increase of pension liabilities and similar         1,006
   Deferred taxes                                             -117
   Net change from transition to revised IAS 19                889

   A more detailed presentation is contained in ABB's report for the first
   three months of 1999.

   Note 3, Geographic and Segment Information

   Data per Region             Orders Received            Revenues
  (USD in millions)          January - September     January - September

                                 1999     1998         1999   1998
   Europe                     107,111   10,500        9,987  9,463
   The Americas                 4,020    4,291        4,184  3,575
   Asia                         2,459    1,804        2,142  2,004
   Middle East and Africa       1,746    1,816        1,466  1,262
   Total                       18,936   18,411       17,779 16,304

   All figures exclude the defined power generation business (see Notes
   1 and 9).

   Data            Orders Received     Revenues      Operating Earnings
   per Business Segment                              after Depreciation
   (USD in millions)
                January-September  January-September  January-September
                     1999    1998    1999    1998      1999    1998
 Power Trammission  3,061   3,166   2,799   2,636       273     245
 Power Distribution 2,344   1,953   1,978   1,833       125     109
 Automation         6,093   5,099   5,890   4,855       333     338
 Oil, Gasand        2,286   3,049   2,325   1,973       120     118
  Petrochemicals
 Products and       4,951   4,875   4,551   4,502       309     270
  Contracting 
 Financial Services   510     534     510     534       257     252
 Various Activities 1,682   1,746   1,673   1,795       330     -20
  Corporate
 Sub-total         20,927  20,422  19,726  18,128     1,747   1,312
 Intra-Group       -1,199  -2,011  -1,947  -1,824         -       -
 Transactions
 Total             18,936  18,411  17,779  16,304     1,747   1,312

Note:  1999 figures for Automation include the figures for Elsag Bailey
       Process Automation acquired in January 1999 (refer to Note 6). 1998
       figures exclude ABB's 50-percent share of Adtranz except for operating
       earnings through September 30, 1998 and fully exclude the defined power
       generation business (refer to Notes 1, 8 and 9).  The remaining nuclear
       business is included in Various Activities in all periods.

Note 4, Short, medium, long-term loans
(USD in millions)        Sept. 30,1999*       Sept. 30.1998   Dec 31, 1998
                                                  Restated**
Loans
Short-term loans           5,086                    4,838        3,409 
Medium-and long-term loan  3,045                    2,696        2,808
Total loans                8,131                    7,534        6,217

*) Refer to Notes 1, 8 and 9. 
**)Refer to Notes 1 and 8.

Note 5, Main Exchange Rates

                                        Average             As of      As of
                                        January-          September   December
                                        September            30          31
                                      1999     1998     1999     1998     1998

Euro (1998: ECU)   USD 1.00 - EUR     0.93     0.90     0.94     0.85     0.86
German mark        USD 1.00 - DEM     1.81     1.79     1.84     1.67     1.68
Swedish krona      USD 1.00 - SEK     8.24     7.94     8.18     7.86     8.13
Swiss franc        USD 1.00 - CHF     1.48     1.47     1.50     1.39     1.38

For the first nine months of 1999, changes in exchange rates had a negative
effect of approximately 3 percent on the reported Income Statement items
compared to the same period last year. The balance sheet figures were reduced
on average approximately by 5 percent due to the strengthening of the dollar
when compared to December 31, 1998 and 6 percent when comparing to September
30, 1998.

Note 6, Effects of the integration of Elsag Bailey Porcess Automation

In January 1999, ABB completed the acquisition of Elsag Bailey Process
Automation. The total purchase price was comprised of USD 1,556 million related
to the purchase of shares and stock options and USD 648 million related to the
acquired debt. The Elsag Bailey business is part of the Automation segment and
is included in the 1999 accounts using the purchase method of accounting. The
goodwill related to the acquisition of Elsag Bailey Process Automation amounted
to USD 2,192 million.

Note 7, Unusual items

The 1999 figures reflect a capital gain of USD 162 million net of taxes, related
to the contribution of ABB's power generation business to ABB ALSTOM POWER in
exchange for a 50-percent participation in that company and USD 1,500 million in
cash (refer to Note 9).

The mentioned figures represent the net gain from the transaction after
providing for ABB's 50-percent share of a EUR 700 million (USD 723 million)
restructuring provision set up in the opening balance sheet of ABB ALSTOM POWER,
as well as adequate coverage of exposures.

Note 8, Effects of the discontinuation of the ABB Daimler-Benz Transportation
Group (Adtranz)

Following the discontinuation of the Adtranz business in the 1998 year-end
accounts, figures for the first nine months 1998 have been restated to exclude
Adtranz from the ABB Group consolidation and the segment presentation, except
for earnings. The main difference to the income statement figures published in
the previous year's accounts concerns revenues whereas earnings have not
changed:

(USD in millions)       January - September, 1998    January - September, 1998
                                 as restated 1999             as reported 1998*
Revenues                                   21,123                       22,312

*) Adtranz was included through proportional (50 pctcent) consolidation in the 
   ABB Group.

More details on the effects of the discontinuation of Adtranz are contained in
the Annual Report 1998.

Note 9, Transfer of the ABB power generation business and formation of ABB
ALSTOM POWER N.V.

On June 30, 1999, ABB transferred its power generation business (excluding the
businesses described in Note 1) to ABB ALSTOM POWER. As a consequence, those
operations (except for their Income before Taxes and following earnings levels)
are, as from the first half report 1999, no longer contained in the Income
Statement and Balance Sheet of ABB. Summarized below are the figures of the
defined power generation business used for the re-statement 1999 (period
January-June) and 1998 (January-September) in the pro forma presentation of
ABB's Financial Statements.

Income Statement                              Year to date        Year to date
(USD in millions)                             January-June*  January-September
                                                      1999                1998
Revenues
Revenues                                             3,460                5,175
Expenses, changes in work in progress, depreciation -3,375               -5,041
Unusual items                                          -31                   -7
Operating Earnings after Depreciation                   54                  127
Finance net                                             -3                   -2
Income/loss before Taxes                                51                  125
Taxes and minority interests                           -15                  -40
Net Income                                              36                   85

*) Figures up to the exclusion of the defined power generation business at the
end of June 1999.

Balance. Sheet                                       December 31
(USD in millions)                                           1998

Current assets                                             6,823
Fixed asset                                                2,124
Total Assets                                               8,947
Current liabilities                                        5,214
Non-current liabilities                                    2,155
Stockholders' equity                                       1,578
Total Liabilities and Equity                               8,947
Total LiabUlties and Equity                                8,947

The new joint venture ABB ALSTOM POWER is equity accounted by ABB as from July
1, 1999 according to its 50-percent share. As a result, in the first nine months
report ABB ALSTOM POWER's orders, revenues, number of employees and balance
sheet items are not included in ABB's Financial Statements as stated in the
pertinent footnotes.

Earnings from the equity accounting of ABB ALSTOM POWER are reported in the
specific caption of the Income Statement. ABB ALSTOM POWER reported a break-even
ordinary result for its first three months of operations. As a consequence of a
thorough review of the business, requested by its parent companies at inception
and completed during the third quarter of 1999, ABB ALSTOM POWER took one-time
costs and provisions for project risks, quality and cost overruns in its income
statement. Accordingly, ABB fully charged its 50 percent share of this amount to
its own income statement. However, there was no negative impact on ABB's
earnings.