Ericsson Reports Profits Jump $681.3 Million

Swedish wireless giant LM Ericsson AB(ERICY Quote) raised its 2000 sales forecast Friday and said first-quarter profits more than quadrupled on demand for cellular equipment and new phones.

Ericsson's ADRs inched up 9/16 to 90 in midday trading. (Ericsson closed down 1, or 1%, at 88 7/16.)

Ericsson, the No. 3 global manufacturer of mobile phones, reported strong demand for its core network equipment, but said profits were weaker in its mobile-phone unit.

Stockholm-based Ericsson said pretax profit jumped to 6.1 billion Swedish kronor ($681.3 million) from 1.3 billion kronor in 1999. Ericsson said net income rose to 4.25 billion kronor, or 2.15 kronor a share, from 905 million kronor, or 0.49 kronor a share, in the year-earlier period. Consensus estimates among analysts were for 3.018 billion kronor in pretax earnings. The company's operating profit jumped to 6.4 billion kronor from 1.8 billion kronor.

Sales climbed 42% to 59.1 billion kronor from 41.6 billion kronor.

Ericsson said it expects pretax profit to double this quarter from the 2.96 billion kronor reported in the year-earlier second quarter, and for sales to increase more than 25%; the company's previous sales forecast called for 20% growth.

The first-quarter result included a capital gain of 1.05 billion kronor from the sale of part of its stake in Internet service company Saraide.com to InfoSpace.comInc.(INSP Quote) Ericsson said it expects the second quarter to include one-time items of the same magnitude.

Ericcson trails Nokia(NOK Quote) and Motorola(MOT Quote) in the mobile phone category.