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

To: Eric L who wrote (5143)	2/20/2003 2:18:16 AM
From: elmatador	Respond to of 5390

Market Insight: Nordic telecoms hit by high bills By Christopher Brown-Humes in Stockholm FT.com site; Feb 18, 2003 The Moody's credit rating downgrade suffered by Ericsson of Sweden on Tuesday served as a stark reminder of the woes that continue to afflict the global telecommunications equipment sector. The industry, entering a fourth consecutive year of downturn, is still battling to cut its costs faster than its revenues are falling and, crucially, there is still no sign of telecom operators starting to spend heavily on network equipment again. Ericsson is one of four companies that have suffered particularly heavily from the slump. Like Nortel and Lucent of North America and Alcatel of France, it saw its share price fall by more than 90 per cent from the 1999/2000 peak to the 2002 trough, and all four companies have seen their debt downgraded by the credit rating agencies to junk status. Nokia of Finland, Siemens of Germany and Motorola of the US have also seen their share prices fall sharply, but they have suffered less, partly because they are not as extensively exposed to telecom infrastructure as their colleagues. Even after some recovery in their shares in recent months, European telecom equipment stocks have underperformed the Eurotop 300 by 64.4 per cent since the start of 2000 In the US, equipment makers have underperformed the S&P 500 by 74.5 per cent. The industry has suffered from over-investment at the peak of the IT and telecoms boom and is now paying the price. In the mobile sector, European operators overpaid for third-generation licences in 2000 and have been trying to repair their balance sheets ever since. They are not building out their existing networks, even though there is evidence of capacity constraints, and they have delayed rolling out their third-generation networks. It is not just the companies which overspent on 3G licences that are cutting back on their investments. As Kurt Hellström, the Ericsson chief executive, has noted even companies without big debts, like the big Chinese operators, have adopted a more cautious attitude to spending. Nor are companies merely cutting spending, they are also trying to drive down equipment prices. Faced with a near halving of revenues in some cases, the only way companies have been able to respond is through radical cost-cutting. Between them Ericsson, Lucent, Nortel and Alcatel have cut well over 200,000 jobs in the last three years. Shares in the telecom equipment makers have rebounded since last year, partly on hopes that the worst is over. But, in its comments on Ericsson on Tuesday, Moody's warned it could be next year before there are real signs of the market stabilising. "We have a negative recommendation on the sector. It's still deteriorating, even if the rate is slowing," says Stuart Jeffrey, analyst at Lehman Brothers in London. Some markets, such as Europe, may show some increase this year, but others, like the US and Asia, will decline. Optimists argue that spending on infrastructure is unsustainably low and that operators will soon start to order more equipment, particularly as their own balance sheets are rebuilt. But more radical measures may still be needed to ensure the industry's long-term profitability. "You have to have consolidation. Even when things pick up, there's not going to be enough wallet for all the equipment makers to make a decent return on capital," says Roger Appleyard, credit analyst at ABN Amro in London. In the meantime, analysts remain unusually divided about the value of individual companies Take Ericsson. Its B shares closed yesterday at SKr6. Morgan Stanley believes they are worth SKr2.50. Dresdner Kleinwort Benson has a target of SKr40.

To: Eric L who wrote (5143)	4/28/2003 6:29:33 AM
From: elmatador	Respond to of 5390

Sony Ericsson faces further questions By Christopher Brown-Humes in Stockholm Financial Times; Apr 25, 2003 Sony Ericsson, the world's fifth-largest mobile phone maker, faced fresh questions about its future yesterday after seeing its market share fall and losses come in above expectations in the first quarter. But the group, jointly owned by Sony of Japan and Ericsson of Sweden, said it was sticking to a forecast of a profit for the full year, even though analysts are increasingly sceptical about the target being met. "All the figures that the company presented in the first quarter were disappointing. Unless there is a dramatic improvement in the second quarter, it is increasingly likely that Ericsson will want to withdraw from the joint venture," said Jussi Uskola, analyst at Nordea Securities. Sony Ericsson reported a net loss of €104m for the quarter, after making a €3m profit in the same period a year ago, as sales slumped to €806m from €1.123bn. Its market share, which rose sharply in the fourth quarter of last year from 4.8 per cent to 6 per cent, fell to 5.5 per cent, based on sales of 5.4m handsets in a total market of 98m. Its average selling price fell sharply to €149 from €174 in the fourth quarter. Jan Wareby, executive vice-president of Sony Ericsson, said: "Price pressure was somewhat tougher than we had expected. The GSM market in the US was also slower." But he forecast a rebound in volumes, market share, selling prices and results in the second quarter. The company will start shipping a range of new phones, including CDMA products and the T610 camera phone during this period. Ericsson suffered heavy losses from mobile phones before it injected the business into the venture with Sony in October 2001.

To: Eric L who wrote (5143)	4/29/2003 5:19:24 AM
From: elmatador	Respond to of 5390

Ericsson to cut 7,000 more jobs By Nick George in Stockholm Published: April 29 2003 8:25 \| Last Updated: April 29 2003 8:25 Ericsson shares surged 15 per cent as 7,000 new job cuts unveiled by the world's largest supplier of mobile telephone networks on Tuesday helped take investors' minds off its grim first quarter report. The Swedish company, which also warned it would not reach profitability this year, reported a net loss of SKr4.3bn, its 10th consecutive quarterly loss, with sales down 30 per cent to SKr25.9bn. The fall in orders was even worse, down 35 per cent to SKr27.1bn. The company also adjusted down its outlook for the total market for mobile networks saying that this could now decline by more than 10 per cent this year in US dollar terms. The uncertainty in the macroeconomic environment has increased, and several operators are reducing their capital expenditures. Previously the company had said the market would fall by up to 10 per cent. The figures give a bleak backdrop for Carl-Henric Svanberg, the company's new chief executive who took over from Kurt Hellström earlier this month. Ericsson had previously said it would reach profit sometime this year, but the new restructuring measures which will involve SKr11bn in extra charges and mean this will not now be possible. Analysts said the extent of ricsson's new restructuring programme came as a positive surprise to the market and expected it to quickly translate into improved results, despite the additional charge. Ericsson's most-traded B shares opened more than 15 per cent higher at SKr7.15. At is peak in 2001 Ericsson employed around 107,000 but Mr Svanberg said this figure was down to 61,000 at the end of March. The aim had been to reduce the workforce to around 54,000 this year but, "with the additional actions, headcount will approach 47,000 next year," he said. "The macroeconomic environment has become more uncertain with weaker short-term demand, further actions are therefore needed. We are heading in the right direction but a lot more can be done to simplify our way of working and further reduce costs." The new cost reduction actions launched will further reduce cost of sales by approximately SKr8bn and the annual operating expenses by SKr5bn. The actions will be fully implemented by the third quarter 2004. Mr Svanberg is thereby reducing the target for operational expenses to SKr33bn a quarter from the present target of SKr38bn. In the three months to March 31, they stood at SKr47bn. Ericsson said it despite its problems it expected to maintain our shares of the mobile systems and professional services markets this year. "However, our total sales reported in SKr will decline more than the total market, mainly due to foreign exchange effects. Divestments and closure of certain businesses as part of our restructuring activities also continue to affect our sales." "Previously we indicated that we planned to return to profit at some time during 2003. This plan did not include additional restructuring measures. Excluding the additional charges for restructuring announced today we remain determined to return to profit during 2003," it said.

To: Eric L who wrote (5143)	5/2/2003 1:01:35 AM
From: elmatador	Read Replies (1) \| Respond to of 5390

Svanberg swell Financial Times; Apr 30, 2003 A tad more esprit de corps at Sweden's Ericsson yesterday. The results presentation by chief executive Carl-Henric Svanberg, 50 - only in his third week at the group - was more confident than any managed by predecessor Kurt Hellström after 18 years. Indeed, the sense that the telecommunications equipment manufacturer may at last be getting a grip on its costs helped drive the shares up 20 per cent, which did not harm the outlook for Svanberg himself. He spent SKr 100m (€11m) buying Ericsson shares in February when he agreed to take the job. Yesterday's surge means he is sitting on a SKr 15m gain, although that was not something on which he dwelt while announcing a further 7,000 job cuts.