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Technology Stocks : Ericsson overlook? -- Ignore unavailable to you. Want to Upgrade?

To: Grashopper who wrote (4354)	10/20/2000 9:33:46 AM
From: Terry D	Respond to of 5390

Is it just a handset problem? From Bear - Most of the problems came from the handset side. What is surprising is guidance going forward. ERICY is dramatically revising guidance for both Q4 & 2001. They are not being very specific, but it does appear that on the handset side, ERICY is seeing significantly more pricing pressure than they anticipated in the last few month. ERICY also thinks there is too much capacity in this industry; thus, they are experiencing pricing pressures, especially in the last few weeks. They anticipate it should persist for the next few quarters. Essentially, they are indicating they are going to lose about $2 billion in the handset business this year. They are also saying the cash flow for this quarter and for the entire year is and will be negative. ERICY is seeing increased requirements for financing. ERICY is also pointing to wireless infrastructure growth in Q4, which is likely to slowdown quite dramatically. Thus, we have a situation where the handset business continues to deteriorate, on top of which one is seeing some weakness in infrastructure--ERICY is the largest infrastructure player in the world. ERICY mentioned they are seeing a little bit slower growth in the U.S. partially because of difficult comps. as well as in Japan.