Sweden Telecom Giant’s Profit Up
STOCKHOLM, Sweden (AP) _ Swedish telecommunications giant Telefon AB LM Ericsson Thursday reported pretax profit of 17.22 billion kronor, or $2.179 billion, for fiscal year 1997, a 70 percent gain from 1996.
The profit was about 600 million kronor higher than analysts had expected. Pretax profit in 1996 was 10.15 billion kronor.
Net sales were up about 35 percent to 167.74 billion.
Chief Executive Lars Ramqvist said in a written statement that the fourth quarter brought mixed results from Asia, with a downturn in certain southeast Asian countries but a strong increase in China.
Also Thursday, the Ericsson board of directors announced that Ramqvist will resign from his post March 30 to become chairman. Sven-Christer Nilsson, currently head of the cellular systems-American standards division, will become CEO.
Ericsson’s operating income jumped sharply to 18.76 billion kronor in 1997 from 10.76 billion kronor a year earlier, mainly due to strong gains in the two main business areas: Mobile Systems and Mobile Phones, and Terminals.
Ericsson said its troubled Infocom systems area continued to show unsatisfactory earnings due to price pressure in the major product areas, ongoing restructuring costs, and continuing technical development programs.
Ericsson makes advanced systems and products for wired and mobile communications in private and public networks.