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

To: Mika Kukkanen who wrote (4809)	9/4/2001 12:26:59 PM
From: Jim Oravetz	Read Replies (2) \| Respond to of 5390

Ericsson Warns Slow Growth May Persist Into 2002 in Core Mobile-Systems Market Dow Jones Newswires STOCKHOLM -- Telefon AB L.M. Ericsson warned Tuesday that conditions in its core mobile-systems market appear to be worsening and said the slow growth could persist into next year. "Our market environment is even more uncertain," Chief Executive Kurt Hellstroem told analysts in London. The Swedish telecommunications giant said it expects the mobile-systems market to show flat to modest growth this year, as it did when it reported second-quarter results. But Chief Financial Officer Sten Fornell said "we have to emphasize flat even more" now. Mr. Fornell also said that Ericsson foresees the flat to modest growth continuing into 2002. The gloomy comments drove Ericsson's shares sharply lower. The stock -- which had been nearly 4% up in early trading -- was down 8.6% in midday trading in Stockholm at 46.50 Swedish kroner. Mr. Fornell also said Ericsson foresees a "more gradual uptake" of General Packet Radio Services, or GPRS, than it did previously. He said the slowdown is attributable to delays in bringing GPRS handsets to the market and to the general slowdown in the economy. GPRS technology permits a phone to maintain a connection to the Internet and allows faster data transfer. Ericsson plans to spin off most off its phone operations into a joint venture with Japan's Sony Corp. on Oct. 1. Mr. Fornell said the the joint venture's aim is to be profitable from the start, but he added that "this will be a little bit more of a challenge in the current situation." Mr. Fornell said Sony and Ericsson will each be investing about 280 million euros in the venture. He said the venture also will borrow externally on its own. Mr. Fornell said the systems market has been hit by a "quickly worsening situation in Latin America," where he said operators are postponing investments in new capacity. He said Ericsson expects the market conditions in Latin America to persist into the fourth quarter and likely into the new year. Mr. Fornell said spending in the Chinese and Japanese systems markets remains strong, while spending is weak elsewhere in Asia and in Europe. He said there are signs of some resurgence in North America. Ericsson hasn't provided guidance on the financial results that it expects for the third quarter or the full year. Ericsson reiterated its forecast for global handset sales of 400 million to 440 million this year.