Ericsson Meets Low Q1 Expectations
- Income before taxes of SEK 0.6 b.; slower market growth in telecommunications
- GSM and ENGINE sales up more than 30%; overall sales down 4% for comparable units due to drop in mobile phones
- Additional efficiency program immediately implemented to improve cash flow and restore profitability
- Outlook: Q2 income before taxes will not improve compared with Q1(1); unknown duration and magnitude of market slowdown prevents full-year guidance
(1) Excluding restructuring charges and non-operational capital gains
"A general economic downturn and an abruptly slower telecom sector are affecting our customers as well as us. Many operators are postponing their investments, which has resulted in an overall reduction of sales," said Kurt Hellstrom, President and CEO of Ericsson. "Even in this slowing business environment we have increased mobile systems sales by 9%. In GSM, sales were up over 30% and continued to outpace the market, while TDMA and PDC sales were affected by declining demand."