Ericsson reported fourth-quarter sales of SEK 58.3 billion, down 13 percent from a year earlier amid continued weakness in network operator spending on new equipment. Ericsson said operators in Europe, the Middle East and Africa were increasingly cautious about investments, while in China, India and the US, customers are still investing. Demand for services remained strong, especially for services increasing operator efficiency. Excluding divestments and acquisitions, Ericsson's sales fell 16 percent, and revenues were down 20 percent when adjusted for currency effects. The acquired Nortel business in North America contributed sales of SEK 2.7 billion in the quarter and helped double revenues from the region. Cost reductions helped Ericsson maintain the operating margin, excluding joint ventures, at 13 percent, while operating profit fell to SEK 7.5 billion rom SEK 9.0 billion a year ago. The result includes a profit from the Nortel activities. Including its share of losses from Sony Ericsson and ST-Ericsson, the company posted quarterly net profit of SEK 0.7 billion, down from SEK 4.1 billion in Q4 2008. Ericsson increased adjusted cash flow for Q4 and the full year, to respectively SEK 13.6 billion and SEK 28.7 billion, and raised its dividend to SEK 2.00 per share from SEK 1.85 in 2008. Ericsson said its cost-cutting programme remains ahead of schedule, and it now expects SEK 15-16 billion in annual savings by the second half of this year, versus an original target of SEK 10 billion saved. The related charges for the programme are estimated at SEK 13-14 billion, more than double the earlier estimate of SEK 6-7 billion, while the reduction in staff levels was increased to 6,500 job cuts from 5,000.

 source:telecompaper