The tale of two vendors

30 Oct 2003

Two of the world’s largest equipment vendors have announced third quarter financials today, with both reporting narrower losses on the back of stringent cost cuts and falling sales. Ericsson weighed in with the largest loss – SKR3.9 billion (USD505 million) – though this was a marked improvement on the SKR5 billion loss it reported for the same period of 2002. Sales fell 16% to SKR28 billion from SKR33.5 billion. On a brighter note, revenues for the final quarter of the year are expected to show significant growth as a result of seasonal variations. Cost reductions have seen the headcount at the Swedish vendor fall from 105,000 at the end of 2000 to an anticipated 47,000 by the end of next year.

Meanwhile rival equipment manufacturer Alcatel has reported a net loss of EUR284 million for the three months to 30 September 2003, compared to a loss of EUR1.35 billion in the same period a year earlier. Sales, like those at Ericsson, fell markedly, declining 13% to EUR3.04 billion. The company predicts that the final three months of the year will see sales increase by around 20%; it expects to exceed its full year target of breaking even on an operating income. For the full year Alcatel expects its net cash position to be stable when compared to 2002, and is aiming to bring its employee count down to 60,000 by the end of the year, from 119,000 at the end of 2000.

France, PriMetrica's Global Comms database