Ericsson posts profit
Ericsson has posted an adjusted third quarter pre-tax profit, as the firm continues to benefit from radical cost cutting.
The Swedish telecoms equipment maker had sales of SEK28 billion (€3.22 billion) in the third quarter, down from SEK33.5 billion in the same quarter in 2002. However, the figure for net orders booked in the quarter was SEK28.1 billion, up 37 per cent from SEK20.5 billion in the third quarter of 2002.
In the three months to 30 September, the company posted an adjusted pre-tax profit of SEK1 billion, which compares with a loss of SEK3.6 billion in the same period a year earlier. Still, on a net basis, the company suffered a loss of SEK3.9 billion and losses per share of SEK0.25. This is a year-on-year improvement on the SEK5 billion loss made in the same quarter in 2002.
In his comments, Ericsson CEO Carl-Henric Svanberg focused on the fact that the company had enjoyed a gross profit, rather than focusing on the company's net losses.
"Ericsson is back to profit, which is an important milestone, but a lot still remains to be done before we reach good profitability," he said. "The cost savings, as well as cash flow and gross margin improvements are the result of dedicated employees with a clear understanding of the need to be in control of our own destiny."
According to Svanberg, the telecoms industry is recovering and that operators are successfully reducing debt and strengthening their financial position. "The gradual shift in focus from financial restructuring to business development leads us to believe that the market is stabilising and that the dramatic market decline is behind us," he said.
Ericsson's numbers were helped by the radical restructuring that the company had undertaken since the beginning of the telecoms slump. The company has a global headcount of 53,401 employees, down from 71,723 at this time last year. The company says that it plans to cut its total number of employees to 47,000 during 2004.
The news comes only weeks after mobile phone maker Sony Ericsson has reported a third quarter profit after almost two years of continual losses. The number five phone maker, a joint venture between Japan's Sony and Sweden's Ericsson, posted a €39 million pre-tax profit during its third quarter.