Oct. 27 (Bloomberg) -- ABB Ltd., the world's largest maker of power transformers, may say third-quarter profit jumped, boosted by orders for equipment from oil refiners and work to repair damage caused by Hurricane Katrina.

Net income probably climbed 53 percent to $150 million from $98 million a year earlier, according to the median estimate of 11 analysts surveyed by Bloomberg. Sales at Zurich-based ABB, scheduled to report tomorrow, rose 7 percent, the survey showed.

ABB, which faced bankruptcy in 2002, is on course to report its first annual profit in five years as Fred Kindle spends his first year as chief executive moving production to China and India to cut costs. Sales are rising as oil companies including Exxon Mobil Corp. expand refineries and pipelines to cope with demand, and power networks are restored in storm-hit U.S. areas.

``The new boss has gained investors' confidence,'' said Dieter Buchholz, who manages about $2.8 billion at BNP Paribas Private Bank in Zurich. ``There is a shortage of power, so that will continue to be one of the drivers of the company's performance.''

Shares of the Swiss company have advanced 44 percent this year, valuing it at 19 billion Swiss francs ($15 billion). That compares with a 2.2 percent decline at German competitor Siemens AG and a 33 percent gain at Schneider Electric SA of France.

Of 33 analysts who cover ABB, 14 recommend buying the stock, 13 have a ``hold'' rating and six say ``sell,'' according to Bloomberg data. Company spokesman Thomas Schmidt declined to comment on the earnings estimates.

Beating Estimates

Since Kindle joined on Jan. 1, ABB has beaten analyst estimates every quarter. Profit in the three months through June surged 42 percent to $126 million on U.S. demand and expansion in China, where it was chosen for the world's largest power-line contract, linking China's Three Gorges dam to Shanghai.

``Year over year, the third quarter looks quite strong, but if you compare it to the second quarter, it's relatively flat,'' said Andreas Riedel, a Zurich-based analyst at Bank Sarasin & Cie., with a ``neutral'' recommendation on the stock. ``I'm not sure they're going to get the big orders they had last year. I'll also be watching how fast they decrease their backlog.''

Sales probably rose to $5.36 billion from $4.8 billion, the survey showed. Orders may have risen 13 percent to $5.4 billion.

ABB makes equipment used to measure, move, blend and refine fuels. Oil companies including Irving, Texas-based Exxon Mobil Corp., the world's biggest oil company, plan to spend at least $11 billion to expand plants as fuel prices rise. ABB this quarter won a $100 million contract from Thai Oil to refurbish a refinery and install two machines for purifying kerosene.

Cookies, Baby Wipes

Demand for robots, used for everything from the packaging and handling of cookies and baby wipes to the industrial milking of cows, may also benefit ABB, according to analysts including Bank Leu's Patrick Appenzeller. The company is helping automate a new container terminal in the port of Rotterdam, the Netherlands.

``ABB's markets are very strong, and I don't see any seasonal weakness,'' said Riedel. ``Asia is definitely important and so is the U.S.''

ABB sent extra workers to hurricane-affected areas in the U.S., including Florida, Louisiana and Alabama. They helped restore electricity for Florida Power and Light and shipped replacement equipment to the Central Louisiana Electric Company.

Asia Increase

Analysts expect sustained Asian sales growth, led by markets such as India, where third-quarter profit jumped 47 percent on demand for power equipment. Sales added 25 percent.

``I expect some positive effect from better utilization at the power systems business,'' said Alessandro Foletti, an analyst at Lombard Odier Darier Hentsch & Cie. in Zurich, who raised his rating on ABB shares to ``buy'' in February. ``I expect a solid quarter with continued growth and stable profitability.''

Kindle is stripping out a layer of management and cutting jobs in countries such as Canada and Finland to help meet a target of doubling ABB's profitability by 2009. Output is being shifted to emerging markets, where costs are lower and demand higher.

ABB's business in the U.S., its largest single market, is expected to be profitable for the first time since the company was formed in 1988 through the merger of BBC Brown Boveri of Switzerland and ASEA AB of Sweden, Kindle said on June 30. The U.S. accounts for 11 percent of ABB's revenue.

Kindle took over as CEO in January after asbestos lawsuits threatened the company with collapse. His predecessor, Juergen Dormann, spent two years eliminating almost 45,000 jobs. Dormann sold businesses including units specializing in financial services, energy metering, water treatment, wind energy, power turbines, paper-making equipment and upstream oil services.

Asbestos Lawsuits

ABB, which has paid out about $900 million since 1990 to settle asbestos claims against U.S.-based units, submitted a proposal to cap the value of future claims at about $1.5 billion. A U.S. bankruptcy court-hearing on the plan finished with ``overwhelming support'' from claimants, paving the way for its approval by a U.S. district court, ABB said on Sept. 29.

Kindle joined ABB from Sulzer AG, the world's second-biggest maker of pumps, where he was paid 1.3 million francs last year, together with 633,000 francs from ABB, where he spent four months before taking the top job. Dormann received a total of 5.17 million francs as chairman and chief executive.

On July 5, ABB secured a $2 billion credit line from a group of 20 banks at less than half the interest rate margin paid in 2003 as part of its $4 billion refinancing, suggesting it may be closer to securing investment-grade credit ratings.

ABB owes bondholders 4.73 billion francs. Its debt is rated Ba2, two levels below investment grade, at Moody's Investors Service and one rung higher, BB+, at Standard & Poor's. Total debt was $5.5 billion at the end of December, down from $7.9 billion a year earlier.

``I'm positive about ABB,'' said Rolf Steinmann, who helps manage $6 billion at Generali Switzerland Holding, including ABB stock. ``I'm overweight on the shares and I will stay overweight.''

To contact the reporter on this story: Thom Rose at trose5@bloomberg.net

Last Updated: October 26, 2005 19:04 EDT