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

To: Jim Oravetz who wrote (5134)	1/30/2003 3:53:44 AM
From: elmatador	Respond to of 5390

LEX COLUMN: Sony Ericsson Financial Times; Jan 30, 2003 If Sony and Ericsson thought their joint venture in mobile handsets would deliver quick wins, they will have been disappointed. In a strong fourth quarter for the industry, Sony Ericsson Mobile Communications managed to increase volumes and reduce its loss. But it remains dependent on its parents for funds. For Ericsson, the latest cash injection looks to be the smallest amount it could decently get away with. Fourth quarter shipments increased SEMC's share of the handset market to 6 per cent, below the 7-10 per cent it says it needs to achieve the benefits of scale. But SEMC's lack of profits has more to do with inefficiencies and a muddled product strategy. It failed to deliver enough of its most popular handsets to satisfy demand and has concentrated on the top end of the market, which will not deliver volumes. The combined product, marketing and brand expertise of Ericsson and Sony ought to have generated profits. As it is, they have fumbled the opportunity and reduced the joint venture's market share to half that of the two partners before they got together 15 months ago. Network suppliers no longer need to be in the handset business to promote their own products. Ericsson, with problems aplenty in its core telecommunications network business, should withdraw from the venture. This would leave Sony, still underweight in Europe, to go it alone or find another partner. Motorola, which recently held unproductive talks about acquiring Siemens' handset business, might fit that bill.

To: Jim Oravetz who wrote (5134)	2/3/2003 12:28:01 PM
From: Jim Oravetz	Read Replies (1) \| Respond to of 5390

Ericsson Reports Wider Loss For Quarter as Sales Skid 37% Telecom-Gear Giant Cuts Forecast For Core Wireless-Systems Market A WALL STREET JOURNAL ONLINE News Roundup STOCKHOLM -- Telefon AB L.M. Ericsson Monday said its net loss more than doubled in the fourth quarter on a 37% plunge in sales, and the Swedish telecommunications-gear maker lowered its expectations for its core market. The world's largest manufacturer of equipment for mobile-phone networks reported a net loss of 8.33 billion Swedish kronor ($968.7 million or €900.5 million), compared with a loss of 3.5 billion kronor in the year-earlier period. The 2002 fourth-quarter loss included 6.3 billion kronor in restructuring costs. Ericsson has racked up losses of more than 40 billion kronor since the start of 2001, amid a global slump in demand from wireless operators who have cut capital spending in an effort to preserve cash. Excluding restructuring costs, Ericsson said its fourth-quarter pretax loss totaled 2.2 billion kronor, wider than the consensus forecast of 1.1 billion kronor in a Dow Jones survey. Fourth-quarter sales fell 37% to 36.75 billion kronor from 58.54 billion kronor a year earlier. Shares in Ericsson were down 11% at 6.40 kronor apiece in midday trading in Stockholm Monday. Net orders were up sharply from the third quarter, and the company said it is on schedule to meet its cost-cutting targets, which include reducing its work force to below 60,000 by year end from 64,600 at the start of 2003. When its current cost-cutting initiative started in 2001, Ericsson employed 107,000 world-wide. The company warned that the wireless-systems market could contract by 10% this year after suggesting late last year that industry sales could be nearly in line with those of 2002. But it said its own operations were beginning to stabilize as the benefits of its cost-cutting program feed through. "While we believe that the worst of the market decline is behind us, the market remains unpredictable," Chief Executive Kurt Hellstroem said in a statement. He said sales are likely to fall in the first quarter from the fourth quarter, following the traditional pattern. For 2002, Ericsson said its loss totaled 19 billion kronor, or 1.51 kronor per share, compared with a 2001 loss of 21.3 billion kronor, or 1.94 kronor a share. Sales for the year were down 31% to 145.8 billion kronor from 210.8 billion kronor in 2001. Ericsson's core systems unit, which analysts expected to creep back into profitability in the fourth quarter, posted an operating loss, excluding restructuring charges, of 300 million kronor. Excluding a risk provision, though, the unit was slightly profitable. Haakan Wranne, an analyst at Fischer Partners in Stockholm, said Ericsson's earnings were mixed. The fourth-quarter numbers were generally slightly below expectations, but the result for the systems unit was encouraging, he said. "It was a little bit weaker than we expected, but there were no big disasters," said Urban Ekelund, an analyst at Redeye in Stockholm. "The order intake is still quite weak but, on the other hand, the savings program appears to be doing fine." In January, Ericsson agreed to sell its optoelectronics unit to Northlight Optronics AB.