Still, the group which makes products used by oil, mining and utility companies is upbeat about long-term prospects as a global push to use energy more efficiently is set to drive demand for its products.

Orders at ABB rose 20 percent to $9.826 billion, just shy of the average estimate in a Reuters poll, while net profit edged up 2 percent to $790 million.

Concern that Europe’s debt crisis could crimp capital expenditure and drag down global demand as well as inflation in China had clouded the near-term outlook, ABB said.

Until confidence in the macroeconomic outlook improves, order growth in ABB’s early-cycle business, including low voltage products such as switches for which demand bounces back quickly after an economic downturn, is expected to remain static, Chief Executive Joe Hogan said.

He said uncertainty might cause customers to delay some expenditure in its later cycle power units, making components such as transformers for big building projects, where demand takes longer to recover.

This cautious assessment comes after rival Schneider Electric cut its 2011 profit margin outlook for the second time in three months, as faltering economic growth and inflation in emerging markets took their toll.

Shares in ABB, which have lost some 15 percent so far this year, rose 0.8 percent by 1329 GMT, lagging a 3.6 percent firmer European industrial goods and services sector.

“Despite the solid operating performance, the results were overall a mixed bag,” ZKB analyst Richard Frei said.

Like its peers, Schneider and Siemens, ABB is banking on higher demand for green technology as governments replace ageing power networks and high oil prices make power-saving technologies more attractive.

ABB expects the need to integrate renewable resources into power grids and energy-hungry emerging markets to also drive demand in the long-term.

ABB’s power units, which make up half of revenues, have been slower to recover than its automation units that make industrial robots.

While the quarter was marked by big orders including a $1 billion deal to supply a power link connecting wind farms in the North Sea to the German grid — the group’s largest ever — demand for its later-cycle transmission products still lagged.

Hogan said he wouldn’t rule out more orders in the $800 million to $1 billion range in the future.

“I would say don’t look at these as one-offs. You could see two or three of these a year sometimes,” he said in a video message. 

The group’s effort to cut costs also helped offset pricing pressure in its transmission and distribution unit, which has faced growing competition from Asian competitors.

Orders in its discrete automation and motion division rose 61 percent, buoyed by its acquisition of Baldor and robust demand for electric motors and robots.

But the overall pace of order growth in the division was more moderate, mirroring softening demand in its low voltage business, owing to cutbacks in renewable investments.

Despite double-digit growth in Asia, orders in China dropped 5 percent in the quarter, hampered by slower Chinese GDP growth, Hogan said in a conference call.

ABB has been on a buying spree over the last year and analysts have kept a close eye on the size of its war chest to see where it might pounce next.

Net cash stood at $1 billion at the end of the third quarter, and Hogan said the group was still on the look-out for further buys, though market turmoil might make any deals that come at a high premium harder for the market to swallow.

ABB said it cut costs by $750 million in the first nine months of the year, nearing its $1 billion target for 2011, and said it was confident the pace of savings could continue in the fourth quarter.