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November 16, 1995


By CBR Staff Writer

L M Ericsson Telefon AB reported pre-tax profits of $693m for the nine months, 30% up on last time’s figure of $503m. The 1995 included net capital losses of $3m. Net sales were up 23% to $9.6m against $7.9m last time. Earnings per share were up 44% on the previous year at $0.54 against $0.37 last time. The company also reported a rise in orders of 31% for the first nine months at $11.3m against $8.7m last time. The increase in orders was mainly attributed to the successes of its mobile telephony in the Radio Communications Business which posted a 60% increase in order bookings and accounted for 60% of consolidated order bookings. Third quarter order bookings rose 30% and net sales were up 31%. Outlining its global presence, the company said that the US represented the biggest market for the Swedish telephone company, accounting for 11% of turnover. Combined sales to the US and Canada increased to $1,210m compared to $1.060m last time. It own home market accounted for 10% and the UK, China and Italy each contributed 7% of its total sales. Although the Japanese market for Personal Handyphone System phones saw the most rapid subscriber growth. The company said that it looked to grow its market share for digital pocket phones as a result of a continued high level demand for Groupe Speciale Mobile phones. Nearly half of the world’s 11.6m digital subscribers are connected to Ericsson systems, it said. Ericsson said that it planned to devote a substantial sum of the $11.7m raised from the September share issue to expand its mobile telephony business. Specifically Radio Communications saw turnover up 41.8% at $5,620m, Public Telecommunications, long known as the company’s problem child was up 10.5% at $2,855m, Business Networks rose 8.8% at $1,450m. Components rose 21.2% at $801m and Microwave Systems rose 17.5% at $366m. The company said that the second half of next year may be affected by a strong Swedish crown. A 10% strengthening in the krone could affect Ericsson results by hundreds of millions of dollars, chief financial officer C W Ros said. The numbers exceeded analysts’ expectations, rising $0.90 to $2.20 following the announcement of the figures. The share price had dipped by $0.37 to $2.07 earlier. Ericsson Nikola Tesla, a Croatian subsidiary of Ericsson said it had signed a $13.6m contract to build agreement to build telephone exchanges in the Russian Federation. This deal strengthens Ericsson Nikola Tesla’s position on the market of the Krassnoyarsk area in Siberia, the company said. Tesla, in which the Swede has 49%, said it is already working on several exchanges and a mobile telephone system in that region.

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