Upbeat Ericsson beats forecasts
Swedish telecoms equipment maker Ericsson has announced fourth quarter results which saw better than expected profits and a cautiously optimistic outlook.
Net sales for Q4, 2003 were SEK36.2bn (€3.95bn), down 1 per cent from SEK36.7 bn (€4.01bn) Q4, 2002. Sales were SEK28 bn (€3.06bn) in the third quarter of 2003.
Net income came in at SEK100m (€11m) for the quarter. This was improvement on losses of SEK8.3bn (€908m) in the corresponding quarter of last year and losses of SEK3.9bn (€420m) in the third quarter of 2003. The company's profit figures were adjusted for restructuring charges, non-operational capital gains and losses and capitalisation of development expenses to the tune of SEK3.6bn (€390m).
Carl-Henric Svanberg, president and chief executive at Ericsson, said: "The mobile infrastructure market has definitely stabilised, traffic continues to grow and operators are increasing their focus on network quality and capacity. The year ended with strong sales and we continue to further enhance our leading position."
He attributed the improved performance to restructuring: "Significant improvements in operating profit, gross margin and cash flow have been achieved through increased efficiency and cost of sales reductions. This is the result of the focus on returning the company to profitability including the accelerated efforts in reducing cost of sales. Although the major restructuring is over, with minor adjustments remaining to be completed, by the third quarter 2004, our relentless work to increase efficiency and cost awareness will continue."
Svanberg's relentless work in increasingly efficiency has brought down the company's workforce to 51,583 from 64,621 last year, a 20 per cent fall. Two years ago, Ericsson employed approximately 82,000.
Regarding outlook, Svanberg was cautiously optimistic, saying he believed the market had stabilised and the global mobile systems market in 2004, will be in line with, or show slight growth, compared to 2003. Previously, the firm had expected the market to be merely in line with 2003. Ericsson expects sales for the first quarter to show a sequential decrease due to seasonality but to show moderate growth year-over-year.