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To: Art Bechhoefer who wrote (584)	8/5/1999 11:05:00 AM
From: SKIP PAUL	Respond to of 13582

Thursday August 5, 10:43 am Eastern Time ANALYSIS-Ericsson share to climb on network growth By Mariam Isa STOCKHOLM, Aug 4 (Reuters) - The share price of Sweden's Ericsson is likely to climb by up to 24 percent in the year ahead, analysts say, as the telecoms group benefits from a revival in handset sales and an overall earnings pickup. After many months of lagging its competitors, analysts say Ericsson looks undervalued because of the strong performance of its mobile systems division, which is growing by more than 40 percent and is generating most of the group's profits. Many appear convinced that Sweden's largest company is coming to grips with the problems which led to a 44 percent fall in profits in the first half of 1999, and are now rating Ericsson as highly as its main rival, Finland's Nokia . ''With Nokia the premise of our positive stance is the visibility of stronger earnings growth, but with Ericsson you have got a recovery path for earnings plus the organic growth of the business,'' Commerzbank technology analyst Peter Knox said. Commerzbank upgraded Ericsson to ''buy'' after its first half report was released two weeks ago. It has a 12-month share price target of 310 crowns for Ericsson, pointing to a 24 percent gain, the same as its forecast for Nokia. Others have similar views. ''The key point is that Ericsson's wireless infrastructure business continues to fire on all cylinders...with prospects of growth for the full year exceeding 30 percent,'' Credit Suisse First Boston said in a recent research note. It rates Ericsson as a ''strong buy'' and has a 300 crown target for the share. Nokia, the world's number one maker of mobile telephones, saw its share price fall after it unveiled a 61 percent rise in second quarter profit, in line with forecasts. By contrast, Ericsson's share rose, with most relieved by news it planned to speed up an ambitious cost-cutting programme which aims to cut 15,000 jobs over two years and generate annual gains of 3.5 billion crowns from 2001. Many investors were also reassured by the firm message sent by chief executive Lars Ramqvist, who unexpectedly ousted his predecessor Sven-Christer Nilsson, two weeks beforehand. But the market's reaction seemed odd to some. Ericsson has warned that 1999 profit will fall below last year's 18.2 billion crowns ($2.24 billion) as restructuring and millennium investment costs bite, along with customer risk provisions for emerging markets. It has not given any forecasts, but the average of five recent estimates from London-based banks show Ericsson's pre-tax profits are expected to fall by 10 percent in 1999 to 16 billion crowns. However, they predict a dramatic recovery in 2000, with earnings jumping to around 25 billion crowns. Ericsson's price-to-earnings ratio, a reflection of the company's expected performance, stands at an impressive 45 for 1999, a consensus of five updated estimates show. This is in spite of the fact that Ericsson, the world's third-biggest mobile phone maker, admits its share of that market fell to 14 percent from 15 in the first half of 1999. Its consumer products division only just managed to break even as the company slashed prices, while the unit's operating margin plunged to one percent from 13 percent a year earlier. But a pledge of an imminent turnaround was widely accepted. ''An ageing handset portfolio was responsible for declining sales and profitability close to break-even. As the portfolio is revamped, we look for solid growth to resume and margins to expand to double digit-levels,'' Merrill Lynch said. One reason for the positive note is that while handset sales only account for about a fifth of Ericsson's income, network infrastructure generates around two-thirds of its revenues and is more than twice the size of Nokia's comparable business. And although rivals Nokia and Motorola (NYSE:MOT - news) are selling more handsets, around 40 percent of the world's mobile telephone calls are connected by systems delivered by Ericsson -- more than any of its competitors. Mobile network expansion is leading to a surge in orders worldwide. With more than 70 percent of these going to original equipment suppliers, Ericsson is in a powerful position. Things look even better if you are betting on a recovery in demand from Latin America and from China, until recently Ericsson's biggest market. Ericsson executives have predicted strong growth in China in the second half of 1999. On Monday, the company said it had won agreements to supply more than $400 million worth of wireless orders for Argentian operators. ($1 equals 8.134 Swedish Crown)

To: Art Bechhoefer who wrote (584)	8/5/1999 9:43:00 PM
From: Bernard Levy	Respond to of 13582

my 2 cents on Viterbi and Jacobs. While it is true that Viterbi is slightly better known in research circles, Jacobs was an MIT professor in the early part of his career (a real one, unlike our friend the Surfer) and coauthored with Jack Wozencraft the textbook which was used almost everywhere to teach digital communications to grad students throughout the 70s and early 80s. Also, QCOM is not the first company founded by Jacobs and Viterbi-- they also founded Linkabit, which is now part of TTN.