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Ericsson posts another huge loss
STOCKHOLM, Sweden (CNN) -- Ericsson, the world's biggest maker of mobile phone networks, posted its seventh consecutive quarterly loss as it continued to cut jobs. Its fourth-quarter loss widened to 8.3 billion Swedish crowns ($968 million) from 3.5 billion in the same period a year ago. The loss-making Swedish company said demand for equipment to power mobile phone communications would continue to decline, by as much as 10 percent this year -- in line with forecasts from its competitors Nokia (NOK) and Motorola (MOT). But Ericsson's chief executive Kurt Hellstrom said the company's fourth quarter results "indicate" its business "is beginning to stabilise." "Our overriding objective is to return to profit at some point in 2003 and improve cash flow," Hellstrom said.
"I have to underline that we do not yet see any visible kind of an industry recovery," he said. Ericsson, like its rivals, has seen sales decline as telecom operators slashed spending on wireless equipment in an effort to manage the balance sheets after spending heavily on expansion. Ericsson's sales fell 37 percent to 36.7 billion crowns in the October-December period, just below the analysts' consensus forecast of 37.5 billion crowns. The company said it would continue with its cost cutting programme, including more jobs cuts, to return to profitability. It had 64,600 employees at the end of last year and is aiming to bring its workforce to below 60,000 by the year-end, down from the 107,000 employees at the start of 2001. Ericsson has been forced to go into partnership with Japan's Sony to make mobile phones after losing market share to Nokia and Ericsson and had to ask shareholders for 30 billion crowns to prop up its ailing balance sheet. On Monday, Ericsson said its joint venture with Ericsson would start reporting a profit during 2003. Its stock fell 6.9 percent in electronic Instinet trade on the results before the Stockholm bourse opens for business. The company's stock has lost more than 80 percent to its value since the beginning of 2002.
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