Ericsson nets record profits

Ericsson has announced record profits for the fourth quarter of 2004, sealing the turn in the company’s fortunes. The Swedish telecoms company recorded pre-tax profits of 9.3 billion crowns, taking its full-year profits to 28.4 billion crowns. This compares with a loss of 12 billion crowns in 2003.

Carl-Henric Svanberg, Ericsson’s CEO, said that the company had strengthened its market position. Key new orders and an increased market share have both helped Ericsson to recover its position.

“We have experienced the strongest growth in mobile users ever,” he said. “With 300 million new subscribers in 2004, 27% of the world’s population now has access to mobile communications.”

While sales were up in many markets, they fell in the important North American market. Ericsson put this down to the impact of mergers between operators.

The profits follow a period of radical cuts at the company. From having a workforce of 107,000 worldwide in 2001, Ericsson now employs just over 50,000 people. Sweden was particularly hard hit by the job cuts, yet recently the trend has begun to turn, with the company taking one more employees.

As the profits were announced, Ericsson’s management predicted that the company would continue to gain market share, particularly in IT networks and service applications.

“The good growth of GSM and EDGE continues, especially in emerging markets, driven by the basic need for communication,” said Svanberg.

Sources: Svenska Dagbladet, Dagens Industri, Dagens Nyheter