Ericsson blamed a drop in pre tax profits for the first six months of its fiscal year on a slide in sales of its consumer products.
And the Swedish telecoms supplier was also cautious about future growth prospects. For fiscal 1999, it said it expected revenue growth to be only about 10 per cent, with lower pre tax earnings, including restructuring charges, than 1998. By 2000, however, it anticipated that pretax profits would show an improvement on 1998.
For the six month period, Ericsson saw turnover increase 12 per cent to 92.4 billion kronor, while pre tax profits slipped 44 per cent to $4.3 billion kronor.
The company said that turnover from its network operators and service providers unit jumped 22 per cent to 64.3 billion kronor, while enterprise solutions revenues grew by 10 per cent to 8.3 billion kronor. Consumer products sales declined by eight per cent to 20.1 billion kronor, however.
But revenues from Europe, the Middle East and Africa increased by 17 per cent to 50 bilion kronor, with "strong developments" in Turkey, Spain, France, Netherlands, Greece, Portugal and Ireland.
Asia Pacific, however, saw flat sales of 19.8 billion kronor and China was singled out as a disappoinment compared with very strong turnover in the first six months of last year.
Ericsson also said it would continue with its restructuring plan, which involves axing 8,800 employees this year and a further 6,000 in 2000.
It anticipates that the cuts will save it 3.5 billion kronor each year after 2001, with savings starting to appear in the fourth quarter of this year and totaling about 750 million kronor during calendar 1999.
The restructuring programme has so far cost the firm 3.5 billion kronor, but this figure is expected to rise to 2.500 billion kronor this year.
Earlier this month, the Swedish company reshuffled its top management, following the resignation of Sven-Christer Nilsson, its former president and chief executive.
He was replaced as president by Kurt Hellstrom, while Lars Ramqvist, the firm's chairman, stepped in as chief executive, but only on a temporary basis (see Newswire 8 July, 1999).
IBM and Technical University of Munich team demonstrate how Shor's algorithm, which can't be cracked by conventional computers, can be solved quickly with quantum computing
Hubble Space Telescope finds superflares from young red dwarfs could strip away planetary atmosphere
Younger stars are 100 to 1,000 times more energetic than when they're older
Two of the big four supermarkets will use the system to control sales of restricted products
PUBG news and updates: November's Update #23 to bring new Skorpion pistol and changes to blue zone visibility
Genuinely useful side-arm coming to PUBG in Update #23