Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Thread Formerly Known as No Rest For The Wicked -- Ignore unavailable to you. Want to Upgrade?

To: Tim Luke who wrote (10131)	1/28/1999 9:11:00 AM
From: Mazama	Respond to of 90042

morning, Paul-watch that back, sit up straight, fyi: Ericsson Fourth-Quarter Profit Drops 3% as Sales of Switches, Phones Fall Ericsson 4th-Qtr Net Drops 3%; New Phone Boosts Stock (Update1) (Adds more on phone from 3rd paragraph, detail from 5th.) Stockholm, Jan. 28 (Bloomberg) -- Ericsson AB, the third- largest cellular phone maker, said fourth-quarter net income fell 3 percent because of weaker demand for its fixed-line switches and lower prices for its mobile phones. Profit at Sweden's biggest company by market value fell to 4.745 billion kronor ($610 million or 535 million euros), or 2.41 kronor a share, from 4.880 billion, or 2.48 a share, in the year- earlier quarter. The shares rose as much as 10 percent, however, as that beat average expectations and as Ericsson today unveiled its newest mobile phone due later this year. Ericsson is betting that its new phone -- the world's thinnest at 15 millimeters -- will help it catch up with Finnish rival Nokia Oyj, which dethroned Motorola Inc. as world leader last year with its latest range of sleek phones. Still, Ericsson won't start selling its new phone until mid-year and profit in the first half will fall below last year's first half. ''It is one of the smallest and definitely the thinnest in around,'' said Chief Executive Sven-Christer Nilsson at a press conference. ''It will practically disappear in your pocket.'' Ericsson shares rose 19.50 kronor to 212, having traded at 202 just before the report. Before today, the stock had fallen 27 percent since peaking in July last year. Phone Sales Stockholm-based Ericsson saw sales for its mobile phones and terminals division fall 3 percent in the fourth quarter, as phone prices fell 30 percent. However, Ericsson says it kept its share of the expanding cellular phone market with a 50 percent increase in sales volume. Ericsson first rattled investors in the second quarter when it unexpectedly announced phones sales stagnated in the second quarter and then fell 2 percent in the third quarter. Helsinki-based Nokia saw phone sales soar 50 percent in the second quarter and 94 percent in the third, buoyed by new phone models. Nokia releases its earnings tomorrow. Ericsson has faced production delays in releasing its new phone range. Partly due to that delay, Ericsson said its profit in the first half of this year won't beat the first half of last year. ''It is a surprising statement, which comes from the fact that the new phones will bring in profit in the latter half of the year, '' said Michael Schroeder, an analyst at Opstock Securities in Helsinki. Sales in Ericsson's mobile systems division rose 22 percent to 29.8 billion kronor, the company's fastest-growing division and its third main business. Infocom Systems sales rose just 1 percent to 16.6 billion kronor. Infocom remained unprofitable, Ericsson indicated, partly due to recession in some Asian countries.