L M Ericsson Telefon AB yesterday announced preliminary results for the year to December 31, showing orders up 27% to the equivalent of $8,103m, pre-tax profit up 137% at $372m, on net sales up 34% to $7,540m. An extraordinary amortisation of goodwill of $37m affected fourth quarter operating profit.Ericsson attributed the positive trend to substantial investments in technology that have resulted in new products that have now been successfully launched. All business areas reported higher net sales with the sharpest increase being seen in Radio Communications, whose sales rose slightly more than 70%, making it the largest division in the company. Cellular telephone system operations continued to grow strongly, and Ericsson claims to be the world market leader with a share of just over 40% of total worldwide equipment shipments for analogue systems, and an even higher share of digital systems. Ericsson sees substantial uncertainty in the international market for public telecommunications equipment, which is characterised by lower investments and intensifying price competition, particularly in the major industrialised countries – a trend that has also hurt Siemens AG – but the Swede reckons that it is better placed because it is not as heavily dependent on specific markets as its competitors, so it was able to increase AXE exchange deliveries during the year to 11.7m lines.
