This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Ericsson to Cut 5,000 Jobs (Update)

Updated from 3:49 a.m. EST

Ericsson (ERIC - Get Report) shares were rising Wednesday after the telecommunications equipment maker announced plans to cut 5,000 jobs as fourth-quarter earnings declined 31% to 3.9 billion kronor ($430.9 million) from 5.6 billion kronor a year earlier.

The Swedish company said Wednesday sales rose 23% to 67 billion kronor on "good demand" for the company's "portfolio and across the world." Ericsson said professional services have continued to show strong growth. But the company has been "affected by the economic downturn and the declining demand in the consumer market and has taken necessary actions."

Earnings also declined because of a "dramatic drop" in the contribution from its handset unit, Sony Ericsson. The joint venture with Japan's Sony (SNE - Get Report) last week swung to a fourth-quarter loss of 187 million euros ($243 million).

Ericsson said it has recorded fourth-quarter charges of 2.3 billion kronor and full-year charges of 6.7 billion kronor, resulting in cost savings of 6.5 billion kronor.

The company said it expects further restructuring charges in 2009 estimated at 6 billion to 7 billion kronor, with annual savings of 10 billion kronor expected by the second half of 2010.

Ericsson said it plans to reduce consultants and other temporary staff, and consolidate research and development sites. Of the 5,000 job cuts, 1,000 will be made in Sweden, primarily in Stockholm, the company said.

CEO Carl-Henric Svanberg warned that the financial downturn makes it "difficult to more precisely predict to what extent consumer telecom spending will be affected, and how operators will act."

Shares were up 13.65% to $7.50 in Wednesday mornign trading.

Copyright 2008 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. AP contributed to this report.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
ERIC $11.44 3.06%
SNE $31.18 -0.19%
YHOO $43.07 -0.71%
AAPL $131.78 -0.20%
FB $80.14 -0.50%

Markets

DOW 18,126.12 -36.87 -0.20%
S&P 500 2,120.79 -2.69 -0.13%
NASDAQ 5,097.9760 -8.6170 -0.17%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs