BBC Homepage World Service Education
BBC Homepagelow graphics version | feedback | help
BBC News Online
 You are in: Business
Front Page 
World 
UK 
UK Politics 
Business 
Market Data 
Economy 
Companies 
E-Commerce 
Your Money 
Business Basics 
Sci/Tech 
Health 
Education 
Entertainment 
Talking Point 
In Depth 
AudioVideo 

Monday, 12 March, 2001, 17:09 GMT
Ericsson rings the alarm
Ericsson mobile phone screen
Ericsson blames the US economic slowdown for poor sales of mobile phones
Swedish telecoms giant Ericsson has warned it faces a heavy loss in the first quarter of this year because of the US economic slowdown.

Ericsson had earlier forecast it would break even in the quarter, but now expects to post a pre-tax loss of 4-5bn Swedish kronor ($409-$511m, 278.8-348.4m).

The profit warning, which was not totally unexpected, comes in the wake of similar announcements from US hi-tech companies Cisco Systems, Intel and Motorola.

Ericsson predicts sales will be flat or slightly lower instead of rising 15% as previously expected.

US slowdown blamed

"The current economic slowdown, in particular in the US, has increased the uncertainty about the growth rate in the entire information technology sector," Ericsson said in a statement.

"The slower growth is affecting all of our operations.

"Customers in the US in particular are postponing their capital expenditures. Also in Western Europe, in markets with already high penetration, operators are delaying investments."

In late January, Ericsson said it was outsourcing its production of mobile phones after a huge loss in handsets in 2000.

Ericsson began the first quarter of 2001 with more than 2 million handsets in surplus stock, and is under increasing pressure from investors to move out of their production.

Shares in the world's third largest mobile maker immediately slumped 20% on the news and other key technology shares across Europe also lost value.

Rival mobile phone giant Nokia of Finland shed over 9%, Siemens dropped more than 4% and French telecoms equipment firm Alcatel was down more than 3%.

Search BBC News Online

Advanced search options
Launch console
BBC RADIO NEWS
BBC ONE TV NEWS
WORLD NEWS SUMMARY
PROGRAMMES GUIDE
See also:

26 Jan 01 | Business
Ericsson to stop making mobiles
20 Oct 00 | Business
Ericsson's mobile woes
21 Jul 00 | Business
Ericsson's mobile worries
Internet links:


The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.


E-mail this story to a friend

Links to more Business stories