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SOFTWARE INDUSTRY NEWS |
Ericsson reports fourth quarter results |
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Ericsson, the Swedish juggernaut of mobile phone networking equipment, has said that sales dropped 16 percent during the fourth quarter to SEK 58.3 billion (Swedish Kroner) ($8.1 billion) as compared to SEK 67 billion a year ago in the same period. It said its profit too plummeted 82 percent during the fourth quarter to SEK 700 million ($97.2 million) from SEK 4.1 billion. The company is now reportedly mulling a reduction of around 1,500 jobs. The Stockholm based company said, “During the year, operators in a number of developing markets, especially in Central Europe, Middle East and Africa, have become increasingly cautious with investments.” Ericsson President and CEO Hans Vestberg said the second half of 2009 saw sluggish network sales impacted by reduced operator spending in a number of markets. He said the shift from voice telephony to mobile broadband investments continues, with users and traffic increasing rapidly in a trend that would eventually connect billions of people to the Internet. It said the shift “follows the anticipated decline in GSM sales, accelerated by the current economic climate, which is not yet offset by the growth in mobile broadband and investments in next-generation IP networks.” “For 2010 we are determined to increase our efforts to combine our strong technology leadership position and service capabilities to provide value to our customers and ensure our continued healthy financial development,” concluded Hans Vestberg. Sales in the quarter were 16% lower year-over-year for comparable units. The acquired Nortel business contributed sales of SEK 2.7 billion in the quarter. For the full year, sales for comparable units were stable but lower by 9% adjusted for currency exchange rate effects and hedging. Operating expenses amounted to SEK 14.0 billion, lower than the SEK 15.3 in the same quarter the previous year, excluding restructuring charges but including operating expenses from the acquired Nortel business. Two of its ventures continued to be a strain on Ericsson, its cellphone arm Sony Ericsson and chip maker ST-Ericsson. Sony Ericsson lost €167 million or $237 million during the fourth quarter, and €836 million for the year. Units shipped in the quarter were 14.6 million, a sequential increase of 3% and a decrease of 40% year-over-year. Sales in the quarter were € 1,750 million, a sequential increase of 8% and a decrease of 40% year-over-year. The sequential increase was driven by seasonality and sales of Satio and Aino phones. ST-Ericsson lost $125 million in the fourth quarter and $539 million for the year. Net sales in the quarter showed an increase of 2% sequentially with further momentum in China. Adjusted operating loss in the quarter was $-50 (-98) million. Inventory declined while net cash increased $ 13 million sequentially to $229 million, including a one-time payment of $53 million from parent companies. |
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