ABB posted a rise in first quarter profits that narrowly missed analysts' forecast as the Swiss engineering giant said slowing growth in China and austerity measures in Europe would erode sales in some key markets.

The Zurich-based group said earnings before interest and taxes for the three months ending in March rose 3.9 percent to $1.05bn while net for the period lifted 5 percent to $685m, around $7m shy of Street estimates. The firm's order book, a key measure of future profitability, was largely in-line with forecasts, coming in flat at $10.386bn.

Group sales rose 6 percent to $8.9bn while its net cash position slipped to $1.4bn from $1.8bn.

"We saw improved profitability in several businesses compared to the end of last year, and we intend to build on that momentum to tap the many opportunities we see for profitable growth over the rest of the year," said ABB CEO Joe Hogan.

Orders were down 11 percent Asia and 5 percent in Europe for the period, reflecting the current slow-down in both economies as austerity measures bite and China's central bankers try to tame inflation. ABB said it sees clearer signs of recovery in the United States, where it has recently expanded its capacity with the $3.7bn purchase of low-voltage equipment maker Thomas & Betts Corp. Hogan hinted ABB might have more room for acquistions in the near term, although he said his priority would be to integrate existing deals.

ABB shares fell more than 4 percent at the start of European trading, changing hands at 17.65.