Ericsson Posts Loss for Fourth Quarter

 
 
By Carmen Nobel  |  Posted 2003-02-03 Print this article Print
 
 
 
 
 
 
 

After posting a significant 4Q loss, the wireless giant warns the mobile systems market may decline by 10 percent in 2003.

Telefon AB L.M. Ericsson on Monday reported a significant loss for the fourth quarter of 2002 and warned that the market for mobile systems may decline by 10 percent in 2003, but officials still said the company plans to make a profit before the end of the year. The wireless network equipment giant reported a net loss of $966 million for the quarter, including restructuring costs. This compares with a loss of $405.3 million for the same period a year before. Sales for the quarter fell 37 percent from the same period last year.
For the year, the company posted a net loss of $2.2 billion, compared with a net loss of $2.4 billion in 2001. Sales for the year fell 31 percent.
Officials said that sales for the first quarter of 2003 likely will be lower than those of the fourth quarter of 2002, in line with "normal seasonality." Competitors Nokia Corp. and Motorola Inc. predicted a similar trend in their earnings announcements last month. "While we believe that the worst of the market decline is behind us, the market remains unpredictable," said Kurt Hellstrom, president and CEO of the Stockholm, Sweden, company. "We are planning to return to profit at some point in 2003 by lowering our costs and adjusting to the prevailing market conditions." During the last quarter the company cut 7,100 employees, bringing the number of employees down to 64,600, compared with 107,000 at the beginning of 2001. The company plans to operate with fewer than 60,000 employees by the end of 2003, Hellstrom said.
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