Swedish telecoms equipment maker Ericsson is likely to report a second quarter loss in line with expectations
Published:
7 July 2001 y., Saturday
Swedish telecoms equipment maker Ericsson is likely to report a second quarter loss in line with expectations, but delayed deliveries of third-generation (3G) systems may force it to cut several hundred more jobs, an Ericsson source said on Friday.
The source said Ericsson management hoped that after losses in the first and second quarters, the third and fourth quarters would be in the black, but much depended on whether 3G mobile network delivery orders -- and therefore payments -- started coming later this year. Ericsson was winning new 3G orders, the source said, but operators were vague on delivery timetables.
In late Stockholm trade, shares in Ericsson were down 3.60 percent at 49.9 crowns.
Ericsson, which made a 4.9 billion crown loss in the first quarter because of losses on handsets and falling margins in systems, said in its Q1 statement that Q2 results would not be better. It will release Q2 results on July 20.
In the wake of this week's profit warning from British telecoms equipment maker Marconi , investors have been concerned more bad news could come from Marconi's peers -- such as Ericsson and Nokia .
To return to profit, Ericsson has launched a tough efficiency programme, which includes job cuts of up to 22,000 people or one fifth of its workforce. But unless the market rebounds in the second half, Ericsson has said it could end the whole year in the red.
But the shares have been hit by uncertainty over how soon demand for new systems from operators will pick up. Ericsson is a supplier of 3G telephony in 34 out of just over 50 announced contracts for high-speed 3G systems.
Šaltinis:
forbes.com
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