Ericsson Posts 2nd-Quarter Loss of Nearly $300 Million
Wireless equipment maker LM Ericsson reported Friday that it lost nearly $300 million in the second quarter and said it saw no sign that the market was ready to turn around.
The company, which is the world’s largest supplier of cell phone network equipment, lost $296 million in the three months ended June 30, compared with a loss of $1.9 billion in the same period a year ago.
Net sales were $4.2 billion, down 51% from $8.5 billion in the same period last year.
Ericsson also said it will issue about 8 billion new shares at a lower-than-expected price of 41 cents to raise $3.2 billion.
The company said cost-cutting measures were having an effect, but it warned that demand this year for mobile systems equipment will be worse than it had anticipated.
“The total message here is that we cannot control the market environment and we don’t see really the turnaround,” Chief Executive Kurt Hellstroem said. “But we are in control of our costs and our plans for the future.”
He said he expects Ericsson’s work force to be less than 60,000 by the end of 2003. The company had about 76,000 employees at the end of June, down from 107,000 at the beginning of 2001.
In other earnings Friday:
* Mentor Graphics Corp., a maker of software that engineers use to design computer chips, reported a loss before charges of $28.1 million, or 6 cents a share, on a 9% decline in revenue to $135.4 million. Analysts on average were expecting a 4-cent loss. Including one-time items, the loss was $36.6 million, or 56 cents a share, compared with $13.5 million, or 20 cents, a year ago.
* Infineon Technologies announced a sharply reduced loss for its third quarter due to a recovery in chip prices and cost cutting, and forecast rising demand from computer and handset makers. Europe’s No. 2 chip maker reported a net loss of $76.9 million, compared with a loss of $374 million a year ago. Sales at the Munich, Germany-based company rose 10% to $1.42 billion.
* A big jump in revenue helped Chartered Semiconductor Manufacturing Ltd. trim its losses in the second quarter, the world’s third- largest chip maker said.
The Singapore-based company also predicted modest quarter-on-quarter revenue growth in the current quarter. Chartered posted its sixth consecutive net loss of $90.7 million for the second quarter, compared with a loss of $107.6 million a year ago. Revenue was $127.5 million, up 27% from a year ago and a 51% jump from the first quarter.
* Samsung Electronics Co.’s second-quarter profit more than doubled as sales of key products such as computer memory chips, mobile phone handsets and flat-panel displays increased as the economy recovered. The world’s biggest maker of computer memory chips said it earned $1.67 billion, up from $744 million a year ago. Sales grew 24% to $8.49 billion.
