Ericsson Q3 Phone Sales Decline 42%

Stockholm, Sweden— Sales of mobile phones at Ericsson dropped 42 percent in the third quarter, reaching $782.9 million, down from $1.36 billion in the year-ago period. For the nine months, phone sales were nearly cut by half, dropping to $2.24 billion from $4.01 billion in the same period in 2000.

Ericsson reported an adjusted operating loss for its phone segment in the third quarter, hitting $400.3 million, compared with an adjusted operating loss of $377.8 million in the same three months last year. For the nine months, the company's phone segment reported an adjusted operating loss of $1.38 billion, up from an adjusted operating loss of $524.7 million in the year-ago period.

Year-to-date sales of phones into North America dropped 19 percent, to $584.6 million, the company said. Overall phone sales were sequentially flat, with unit volume decreasing from 7.7 million to 7.2 million. This was partially offset by higher average selling prices.

Overall net sales at Ericsson decreased 19 percent in the third quarter, down to $5.19 billion, from $6.40 billion in the same quarter last year. The company reported a net loss of $376.2 million in the third quarter, compared with a $415 million gain for the year-ago three months.

For the nine months, Ericsson recorded a net loss of $1.69 billion, down from a gain of $1.78 billion reported in the same period in 2000.

Looking ahead, Ericsson said it expects overall net sales of $5.23 billion in the fourth quarter, excluding the parts of the mobile phones operations that were transferred to Sony Ericsson Mobile Communications.

For 2002, the company said it expects sales in line with market development of flat to down 10 percent. However, it plans to achieve an operating margin greater than 5 percent for the full year, even with sales declining as much as 10 percent.