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Ericsson to cut 5,000 jobs

Views 2 Views    Comments 0 Comments    Share Share    Posted by Sasmita 21-01-2009  
STOCKHOLM: Swedish telecom equipment giant Ericsson posted a stronger-than-expected fourth-quarter profit on Wednesday, promising deeper savings as it announced 5000 job cuts

The company, which released the results more than a week ahead of schedule for a fourth consecutive forecast-topping report failed to give a specific business outlook. That gave analysts some pause for thought. Ericsson made an operating profit of 9.2 billion Swedish crowns ($1.1 billion) in the quarter, excluding restructuring costs of 3 billion and including a capital gain of 0.8 billion. The outcome compared with 7.6 billion crowns a year earlier and a median forecast in a Reuters poll of 6.7 billion, excluding non-recurring items of 1.4 billion.

"The fourth quarter is very, very strong," said Greger Johansson, an analyst at Redeye. "But at the same time, they take away the planning assumption and increase savings, and that implies their view of 2009 has been lowered," he said. "They don`t give much guidance, and I think that some people will get worried about the fact that they don`t say anything about 2009."

Ericsson`s closest rivals -- Nokia Siemens Networks and Alcatel-Lucent -- have forecast for the market to shrink this year as telecom operators cap spending and Asian rivals put pressure on prices. Only this month, Nortel Networks, North America`s biggest telecom gear maker, filed for bankruptcy.

Ericsson sales shot up to 67.0 billion, from 54.5 billion a year earlier, exceeding a median forecast for 56.7 billion crowns. Chief Executive Carl-Henric Svanberg said there was good demand for the group`s entire portfolio across the world, although he also acknowledged currency movements were a factor in the fourth quarter. The Swedish crown weakened sharply in late 2008.

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