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ABB to post 2001 loss
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January 30, 2002: 3:41 a.m. ET
Swiss engineer sets aside $470 million to settle U.S. asbestos claims
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LONDON (CNN) - ABB, Europe's biggest electrical engineering group, said on Wednesday it will set aside $470 million to clear up U.S. legal asbestos claims.
The Swiss company said the group expects to post a net loss for 2001. To date, ABB has set aside about $940 million for the claims, stemming from its now defunct U.S. unit Combustion Engineering.
"After our detailed annual review of the asbestos issue, we have decided to increase our provisions with an additional charge of $470 million against 2001 earnings, and we expect a net loss for the ABB Group in 2001," said Chief Executive Joergen Centerman.
ABB, which makes products like systems to power factories, electricity transmitters and pipelines and plant for the oil and petrochemical industries, has seen its shares plunge more than 60 percent over the last year amid concerns an economic slowdown would hurt earnings and its exposure to asbestos claims in the U.S..
Its stock was little changed at 16.60 Swiss francs in early Zurich trading on Wednesday.
The number of new claims filed against Combustion Engineering rose to 55,000 in 2001 from 39,000 in 2000, said the company. As of December 31, 2001, 94,000 claims were pending, while the number of claims settled fell to 27,000 in 2001 from 34,000 in 2000.
The average amount paid per claim increased to $6,069 in 2001 from $4,833 in 2000, ABB said. Insurers reimbursed $48 million in 2001 against total payments to settle claims of $125 million.
Centerman told Reuters the company did not expect to make further provision for asbestos related claims. The company reports its 2001 results on February 13. 
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