For the quarter to June 30, the net loss was flat at SEK 2.7bn ($329.9m) on revenue that fell 28.4% to SEK 27.6bn ($3.3bn). At the mid-term stage the loss was SEK 7bn ($851.5m), down from a loss of SEK 5.7bn ($689.8m) on revenue that fell 29.1% to SEK 53.5bn ($6.5bn).
Carl-Henric Svanberg, who was brought in as CEO in February to turn around a company whose survival appeared in doubt, insisted that the company’s financial crisis was behind it. We are on steady ground. We are well on track to regain profitability, he said.
The one flicker of hope is that Ericsson’s book-to-bill ratio has stayed above 1 for the second successive quarter, though orders at SEK 28.3bn ($3.4bn) were 20% down on the same period last year. Svanberg said the market would remain weak in the near term.
Ericsson has market leadership in mobile network infrastructure, and analyst Gartner Dataquest estimated its market share at 29.5% in 2002. Ericsson thinks the mobile systems market could decline by more than 10% this year though it expects to maintain its market share.
Mobile network orders dropped 13% to SEK 20bn ($2.4bn) in the second quarter though sales of fixed-line networks crumpled 42% to SEK 1.7bn ($205m). Sales of professional services, Ericsson’s big hope for the future, declined 14% to SEK 4.6bn ($556m).
Overall sales for the third quarter are expected to be flat or slightly down sequentially, and a recovery in revenue is likely to be some time off. What is turning the company round is an energetic attack on costs, and a workforce that stood at 107,200 in 2001 is now down to 57,600 and is due to reach 47,000 by 2004.
Source: Computerwire
