Ciba Speciality Chemicals, the Swiss industrial group, on Wednesday scotched memories of its poor second quarter with third-quarter figures well ahead of expectations.

The group, which this year bought the chemicals operations of Raisio of Finland, also dispelled fears of an acquisition spree, vowing to focus on building margins in its new businesses. Ciba announced 950 job cuts concentrated on its textiles unit, with its water and paper activities expanded after the Raisio deal.

Armin Meyer, chief executive, said restructuring would result in costs of SFr50m ($41m) next quarter and in 2005, and SFr25m in 2006. But he added that the initiative to bring margins in the two divisions closer to group levels would generate savings of SFr60m in 2006.

“Water and paper are now on a platform where we can raise margins. The focus is consolidation now,” he told the FT. Mr Meyer said Ciba was on track to report higher full-year sales, but was more cautious on profits, predicting an improvement before one-off restructuring costs.

In the third quarter, group sales rose by 13 per cent to SFr1.86bn, while net profits jumped by 22 per cent to SFr132m. Sales in the first nine months were up 5 per cent at SFr5.26bn, while net earnings climbed by 11 per cent to SFr333m.

The latest figures relieved analysts, who had been worried in the second quarter by a squeeze on margins caused by rising raw material prices and fears the company would be unable to impose price increase on customers.

“Ciba's results should go some way to dispelling fears of an accelerated structural decline,” noted Alexandre Pasini at LODH, the private bank.

Mr Meyer attributed the improvement to higher volumes, lower costs and improved pricing, along with stable raw materials expenditure. He also expressed greater optimism on business conditions, compared with his earlier caution, thanks to continued demand in the US and Latin America and strong growth in Asia.