After almost 15 years of financial woes - over-extended with non-focused acquisitions, asbestos law-suits, big settlements, etc - ABB has successfully moved beyond the crisis years.

ABB just announced results for Q2 2007:

• Net income doubles to $729 million
• Continued strong global demand
• Orders up 26%, revenues up 27%
• 14.4% EBIT margin on EBIT of $1 billion
• Operating Cash flow $396 million

With operating profit of 13.6% last year, and a war chest of more than $10B, the automation giant could be preparing to make a major acquisition. They are reported to be considering two: Legrand of France, 2006 revenue $3.74B; US-based Rockwell Automation, $5.56B 2006 revenues. Both are within reach.

After its previous debacle with fragmented acquisitions, ABB will now take a very disciplined approach, focusing on strategic fit, integration costs and opportunities, as well as price.

For years I have been predicting that Rockwell would be sold. Now, belatedly, my predictions may come true. After he took over as CEO from ineffective Don Davis, Keith Nosbusch has done well with Rockwell, raising the stock to heady levels - 70-ish, with market-cap about $11B. But the company has nowhere to go.

My advice to Keith Nosbusch: Acquire something bigger than small-fry ICS/Triplex, or be acquired. With about $1B cash-on-hand, you can do it. If you can't, this may indeed be a good time to exit.

My advice to Fred Kindle of ABB: Rockwell is fair game - go for it!

• ABB Q2 net income doubles to $729 million
• ABB preparing acquisitions; Legrand or Rockwell possible targets
• Rockwell Automation profit gains on better sales