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Ericisson Q4 Sales, Net Plummet

2/05/2003 09:10:00 AM Eastern

Stockholm, Sweden - Mobile phone maker Ericsson recorded lower sales and wider losses in the fourth quarter, as it continues its efforts to reduce costs and return to profitability in 2003.

Fourth quarter sales dropped 37 percent, to $4.3 billion, down from $6.8 billion in the year-ago period. Net loss for the quarter climbed to $969.3 million, up from a loss $408.7 million in the fourth quarter the previous year.

However, the company did manage to improve its adjusted pre-tax loss to $256.9 million in the fourth quarter, ended Dec. 31, compared with a loss of $595.6 million in the same three months in 2001.

Ericsson, which produces its mobile phones in a joint venture operation with Sony, called Sony Ericsson Mobile Communications, recorded a fourth quarter loss for this project of $35 million, significantly down from the reported loss of $81.7 million year over year.

For the year, Ericsson sales slid 31 percent, reaching $17 billion, down from $24.6 billion in 2001. The company's net loss decreased to $2.2 billion for the 12 months, down from a net loss of $2.5 billion in the previous year.

Adjusted pre-tax loss for the 12 months hit $1.7 billion, down from a loss of $2.5 billion in the same period a year ago.

Ericsson said currently there are more than 1.1 billion mobile subscribers worldwide, with about 51 million added during the fourth quarter.

For the 12 months, Ericsson estimates about 190 million net subscriber additions, within its forecast of 175 million to 215 million. The company believes the number of mobile subscribers is on track to exceed 1.5 billion within three years, with 165 million to 180 million net additions anticipated in 2003.

Ericsson cost-cutting plans include bringing its workforce below 60,000 at the end of 2003, down from 107,000 at the start of 2001.

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