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Last Updated: Thursday, 30 October, 2003, 10:22 GMT
Ericsson returns to profit
Ericsson production line
The mobile wireless networks specialist sees a turnaround
Swedish telecoms firm Ericsson returned to the black in the July to September period, seeing off almost three years of losses.

Ericsson reported underlying profits of 1bn kronor ($129.5m; 76.2m) for the three months, compared with a loss of 3.6bn kronor the year before.

Analysts had forecast a profit of 410m kronor for Ericsson, the world's biggest mobile network kit maker.

"The industry is recovering," Ericsson said.

"We expect the mobile systems market in 2004 to be in line with 2003."

Better times?

Better than expected third quarter results at another telecoms engineering giant seemed to bear this out.

French firm Alcatel posted a narrowed net loss of 284m euros ($332.5m) and said it would meets its 2003 financial targets, which include breaking even in the final three months of the year.

Alcatel reported operating profits, though sales continued to fall, down 13% at 3bn euros.

Ericsson's sales also slipped, coming in 16% lower at 28bn kronor against 33.5bn kronor in the same three months of last year, but they were higher than analysts had forecast.

Ericsson chief executive Carl-Henric Svanberg hailed the financial results as "an important milestone" but acknowledged that "a lot still remains to be done before we reach good profitability".

Ericsson is in the midst of a cost cutting programme which includes slashing jobs by more than half, from 107,000 in early 2001 to 47,000 by January 2004.

The programme cost it almost 5bn kronor in charges, which - if included in the headline figure - would mean a 3.9bn kronor net loss.

It also spun off its loss-making mobile phone business into the venture into a joint-venture with Sony.

Analysts were initially upbeat about the results, saying Ericsson may have turned the corner, but the firm's shares fell more than 3% in morning trade in Stockholm.

Mr Svanberg predicted that sales would grow in the fourth quarter of the year, but that orders might not keep pace, and exchange rates would hurt full year sales.

"The Q3 results were better than expected but the outlook was a little boring," said Fischer Partner analysts Haakan Wranne.

Alcatel's shares also slipped in Paris, down 2.6% by midmorning, as analysts took a cautious view of its recovery prospects.


SEE ALSO:
Sony Ericsson sees first profit
15 Oct 03  |  Business
Ericsson losses shrink
18 Jul 03  |  Business
Ericsson cuts 7,000 more jobs
29 Apr 03  |  Business



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