Engineering firm ABB has returned to profit after three years of losses but said it could not predict the costs of its asbestos liabilities.
The maker of industrial robots and electric motors said resolving its £600 million asbestos settlement, which was rejected by a US court, was a key challenge in 2005.
The company, which has a large number of subsidiaries in the West Midlands, posted a £106.6 million net profit for 2004, at the lower end of expectations and compared with a loss of £413.2 million in 2003.
The group's West Midlands divisions include ABB Manufacturing & Consumer Industries Division at Birmingham Business Park; ABB Automation Technology Products, Coventry; ABB Utilities at Stone and ABB Process Industries Division, Telford.
The Swiss-based company said it could not predict what
the financial impact of US asbestos claims would be or when a settlement proposal would be accepted.
ABB had said it expected to resolve its asbestos liabilities without significant extra costs.
"This is a step backwards," said Zuercher Kantonalbank market analyst Claude Zehnder.
The group, which came to the brink of financial collapse in 2002 after an acquisition spree left it laden with debt, watered down its 2005 operating margin target to 7.7 per cent from eight per cent.
However, ABB chief executive Fred Kindle said this was solely due to accounting changes related to the reclassification of its oil, gas and petrochemicals business.
Mr Kindle said: "This does not reflect a change in outlook or ambition level."
Achieving a ten per cent operating margin in its core power technology unit was "achievable" but "challenging", he said.
ABB said it was considering whether to change its £ 635 million Combustion Engineering asbestos settlement plan but said it was committed to keep extra costs at a minimum.
Analysts have expressed concern that the negative ruling on asbestos implied that the total liability might be higher than expected.
Mr Kindle said: "We are still very much committed to keep the costs at reasonable levels, at immaterial levels and also to resolve it in a timely manner."
Settling those claims was also key to achieving the firm's £2.12 billion debt target in 2005, he added.
At the end of December 2004 , total debt was £2.91 billion, compared with £2.75 billion at September 30, 2004, and £4.19 billion at the end of December 2003.
Operating profits came in at £575 million in 2004 compared with the previous year's £189 million, on group revenues of £10.98 billion, which rose one per cent. Orders were £11.5 billion, up ten per cent.