Ericsson ‘stabilises’ despite another loss
Profit this year - promise
Ericsson, the ailing telecoms equipment maker, has posted yet another loss. However boss Kurt Hellström remains optimistic and asserts that the business is beginning to "stabilise".
"Our overriding objective is to return to profit at some point in 2003 and improve cash flow," he said.
"Our cost cutting is proceeding as planned with a significant reduction of operating expenses already evident. We will intensify our efforts to lower cost of sales to meet our gross margin target."
Snag is, the company reckons that the mobile systems market has declined by around 20 per cent in the last year and believes it could reduce by a further 10 per cent over the next 12 months.
Sales for Q4 2002 slid 37 per cent to SEK36.7bn ($4.25bn) from SEK58.5bn in the last three months of 2001. Sales for the whole of 2002 were down 31 per cent at SEK145.8bn ($16.9bn), down from SEK210.8bn in 2001.
Ericsson made a pre-tax loss in Q4 2002 of SEK2.2bn ($250m) a marked improvement on the SEK 5.1bn posted a year earlier. For the full year pre-tax loss fell from SEK21.1bn to SEK14.5bn ($1.7bn).
Ericsson confirmed that during the last three months of the year 7,100 jobs were lost, bringing its year-end headcount down to 64,600.
It expects staff numbers to be below 60,000 by the end of 2003. Looking ahead, Ericsson reckons that the "worst of the market decline is behind us" but that the "market remains unpredictable". ®