Ericsson CEO comments on 1998 results
Ericsson's Chief Executive, Sven-Christer Nilsson, today commented on his
expectations for the full year 1998 results for Ericsson. In a meeting with
financial analysts in Stockholm Sven-Christer Nilsson stated that he expects
the full year 1998 income for the company to be somewhat below market
expectations. Net sales for the full year are also expected to be somewhat
below market expectations.
"My estimate is based on our view of the continued impact of the global
financial crisis which is effecting demand in some of Ericsson's operations,
including in particular Public Networks. The scope of these effects is
reflected in our internal reports for November which have just become
available. Even though there are certain general signs of recovery in some
Asian markets there are wider repercussions on global demand which are now
affecting sales and income. The financial crisis in certain markets and the
related general economic uncertainty, which we have pointed to in our
quarterly reports during the year, is affecting us and emphasizes with renewed
strength the need for a strengthening of the ongoing rationalization programs.
In addition there will be synergies resulting from the introduction of the new
organization. All together this will involve substantial reductions in the
number of employees which will be announced in connection with our 1998 report
on January 28, 1999," said Sven-Christer Nilsson.
"In Mobile phones our operating income during the last months of the year is
negatively affected by the shift in demand towards entry-level phones with
reduced margins. These phones are demanded for the rapidly growing pre-paid
services which now account for one third of the market in Western Europe. In
spite of a strong increase in volumes we have not been able to compensate for
this development in our operating income."
"We continue to see strong growth in mobile systems where we have a world-
leading position. This is an area where demand remains largely unaffected and
where we have a very strong income."
"For next year we expect, as I have earlier mentioned, a slow start of the
year and a development for the whole year below our long term growth
objectives. My expectation regarding Ericsson's long term growth remains
unchanged i.e. we shall exceed the market growth. This we will achieve by
continued restructuring at an increased pace and development of our operations
in accordance with our strategies."
Ericsson is the leading provider in the new telecoms world, with
communications solutions that combine telecom and datacom technologies with
freedom of mobility for the user. With more than 100,000 employees in 140
countries, Ericsson simplifies communications for its customers - network
operators, service providers, enterprises and consumers - the world over.
Please visit Ericsson's Press Room at: ericsson.se
FOR FURTHER INFORMATION, PLEASE CONTACT
Lars A. Stålberg, Senior Vice President Communication
Phone: +46 8 719 3162, +46 70 555 6066
E-mail: lars.stalberg@lme.ericsson.se
Johan Fant, Senior Vice President, Corporate Financial Control
Phone: +46 8 719 3707, +46 70 540 4011
E-mail: johan.fant@lme.ericsson.se
Karin Almqvist Liwendahl, Director, Investor Relations
Phone: +46 8 719 5340, +46 70 590 5340
E-mail: karin.almqvist.liwendahl@lme.ericsson.se
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