Ericsson sales increased 11% to $8.55 billion in quarter ended De...
Ericsson sales increased 11% to $8.55 billion in quarter ended Dec. 31, but earnings per share fell 64%. Swedish phone maker projected 15-20% sales growth this year and 6-8% operating margin as company increase investments in 3rd-generation wireless technology.…
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Ericsson said it took additional restructuring charges of $830 million that it said would will raise cost saving to $1.56 billion this year. It said results were in line with previous guidance. Adjusted operating loss was $160 million, excluding capital gain of $1.6 billion from Juniper shares and other charges. Ericsson Pres. Kurt Hellstrom said mobile phone results “remain unsatisfactory.” Losses were result of “delivery failure from key suppliers and an inadequate product mix in the entry-level market,” he said. “The delivery failures have led to loss of large sales volumes and serious underutilization of production capacity, which has forced us into costly restructuring measures.” Separately, Qualcomm said in SEC filing this week that in last quarter it reached settlement agreement with Ericsson. Companies were in arbitration on concerns raised by Ericsson’s determination of purchase price for its purchase of Qualcomm’s terrestrial wireless infrastructure business in May 1999. Qualcomm disclosed that it agreed to pay Ericsson remaining balance of purchase price under asset purchase agreement, along with interest. Qualcomm also agreed to provide financing of up to $400 million to certain CDMA customers of Ericsson so they could buy CDMA infrastructure equipment and services.