Ericsson expects flat earnings

Ericsson (Thailand) projects its revenue to decline for the second consecutive year due to global sluggishness in the information technology industry, Bangkok Post reported on February 21.
     Lars Bjorkenor, president of the Thai unit of Swedish Telecommunications equipment supplier Ericsson, said the local operator expected revenue would decrease slightly from 10 billion baht posted last year.
     Ericsson (Thailand) experienced its first decline in revenue last year when sales dropped from a peak of 12 billion baht in 2001. However, the decline reflected Ericsson’s group performance worldwide amid weakening in the global telecoms industry last year, said Mr. Bjorkenor.
     “This year, the industry is expecting a further decline of about 10%,” he said, “but there could be an upturn next year after operators adjusted to the market.”
Telecoms companies worldwide were reducing their capital investment and further consolidation of the industry was expected, he said.
     Mr. Bjorkenor said that despite the dip in revenue, the Thai unit this year was projected to maintain last year’s net profit margin of between 5% and 7% of turnover.
This contrasts with Ericsson’s global performance. The group posted losses for the past nine quarters, prompting Carl-Henric Svanberg, the newly-appointed president and chief executive, to announce corrective measures.
     Mr Bjorkenor quoted Mr Svanberg as saying that Ericsson could return to profitability this year after major restructuring and cost-cutting, including a reduction of staff levels.

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