Ericsson has reported its first quarterly profit since 2001 after it booked a profit of US$261 million for the fourth quarter of 2004. This compared with a loss of US$553 million kronor a year ago. For the full year, Ericsson had a loss of US$1.5 billion, down from the US$2.65 billion loss posted for 2002.
"The mobile infrastructure market has definitely stabilized, traffic continues to grow and operators are increasing their focus on network quality and capacity. The year ended with strong sales and we continue to further enhance our leading position," says Carl-Henric Svanberg, President and CEO of Ericsson.
"Significant improvements in operating profit, gross margin and cash flow have been achieved through increased efficiency and cost of sales reductions. This is the result of the focus on returning the company to profitability including the accelerated efforts in reducing cost of sales. Although the major restructuring is over, with minor adjustments remaining to be completed, by the third quarter 2004, our relentless work to increase efficiency and cost awareness will continue."
Adjusted gross margin improved for the fourth consecutive quarter to 41.6% (32.6%), a sequential increase from 35.9%. Ongoing restructuring with cost of sales reductions as well as higher capacity utilization were the main contributors to the improved gross margin.
Sony Ericsson also reported profit for the second consecutive quarter. Ericsson's share in earnings, adjusted for restructuring costs, was US$42 million, compared to US$28 million in the third quarter. Following restructuring in the first half of the year Sony Ericsson has established a solid operational platform. With a full portfolio of products now gaining momentum, the company is well positioned to exploit the opportunities in the fast growing mobile multimedia market.
The strategic focus areas of GSM and Japanese standards posted a 50% and 15% year-on-year growth in shipments, respectively, with the T610 phone continuing to capture market share in all markets. In the quarter, new high-end and entry-level GSM products were introduced as well as two new handsets for the Japanese market."
Posted to the site on 9th February 2004
Posted to: www.cellular-news.com/story/10576.php