Shamelessly "lifted" from Qcom Thread **
Message 10130756
From: michael piturro
Tuesday, Jun 15 1999 5:51PM ET
Reply # of 32387
Ericy.
Tuesday June 15, 4:33 pm Eastern Time
Ericsson sees no restructuring gains in Q2
MINNEAPOLIS, June 15 (Reuters) - Ericsson (Nasdaq:ERICY - news), the world's third
largest mobile phone maker, said Tuesday that a restructuring it launched in January would
not show results in its second quarter.
''We have given the guidance that we have given before, that the recovery is not to be
expected in the second quarter,'' Per Bengtssom, vice president of investor relations for
Stockholm-based Ericsson, told Reuters at the 1999 US Bancorp Piper Jaffray Conference here.
''The phones and infrastructure and things we have talked about will happen in the second half of the year, and primarily in the
fourth quarter,'' he said.
In January, Ericsson said it would cut up to 11,000 jobs over the next two years and warned it would not meet its previously
stated sales growth target of over 20 percent for 1999, due in part to flagging mobile phone sales.
Ericsson said it will introduce a number of new mobile phones in the second half of the year in a bid to recover market share.
New models include mobile phones that are voice activated or have the capability to deliver e-mail messages.
The company said its restructuring efforts are scheduled to be 25 percent complete by the first half of 1999, 50 percent
complete by the second half of 1999 and 75 complete in 2000.
''That means that basically this year we will see more costs than positive effects out of this (restructuring), however, we look
for the year 2000 to have more positive effects of the restructuring,'' Bo Dimert, president and chief operating officer of
Ericsson, told the conference.
Dimert also said Ericsson's near-term costs would be higher because of its acquisition of Qualcomm Inc.'s (Nasdaq:QCOM -
news) land-based wireless CDMA (Code Division Multiple Access) infrastructure.
''By the acquisition of Qualcomm, we suddenly have 1,300 people to pay salaries for, so our costs in the short-term are going
up,'' Dimert said. ''But for the long-term, the infrastructure looks very, very promising.''
The Qualcomm CDMA acquisition was announced in March and closed in the second quarter.
In afternoon trading, American Depositary Receipts (ADRs) of Ericsson were down 25 cents at $31.25 on Nasdaq. In
Stockholm, the stock eased five crowns to end at 262.50.
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