Monday, December 3, 2007
Wednesday, November 21, 2007
NEW YORK — Telecom equipment maker Ericsson on Tuesday (Nov. 20) predicted a weak fourth quarter due to tightening U.S. and European demand and unrest in emerging markets, sending its shares down 11 percent.
Analysts and investors said they were concerned about the company's ability to monitor the performance of its business and were disappointed Ericsson did not give a clear sign when it would start to see improvements.
"It's not good news," said Leo Schmidt, an equities analyst at insurer Chubb Corp, which owns Ericsson shares. He said investors were spooked by the repeatedly revised forecasts.
"That makes people wonder how much management has control of the business," he said.
Ericsson had said in October that fourth-quarter sales would be between 53 billion and 60 billion Swedish crowns ($8.4 billion to $9.6 billion) and that operating margins would be in the mid-teen percentage range.
Chief Executive Carl-Henric Svanberg told investors that it had since become clear that Ericsson would be hurt by tightening network equipment demand in the United States and Europe, a weakening U.S. dollar and political unrest in some markets such as Pakistan, Bangladesh and Thailand.
"We can see that the U.S. and we can see that Europe is tightening," he said. "There are operators that are clearly downgrading their investments for 2008."
Ericsson said it expected a slight decline in business from networks in Europe where operators involved in mergers and acquisitions are slowing spending on upgrades for high-speed wireless data services such as Web surfing.
"We just assume that we'll have continued disruptions from consolidation," Svanberg said. "We do not think for at least the next year that we will have any major (data) upgrades."
He said that tightening U.S. spending could relate to general economic concerns among operators.
Shares in the Sweden-based company tumbled 11 percent to close at 16 crowns in Stockholm, having fallen as low as 15.92, their lowest since February 2004. Its U.S.-listed shares finished down $3.42, or 12 percent, at $25.11.
MARGINS UNDER PRESSURE
Asked whether Ericsson's board still supported management given Tuesday's news, Svanberg said: "I must say we have in this situation very strong support and good cooperation with the board, so there's no change there."
Ericsson is focused on winning share in emerging markets, where it sees the biggest growth opportunities.
"Whatever you lose in market share you will not regain. Time is of an importance here," he said.
But the comments led at least one analyst to question whether this strategy would put pressure on future profits.
Ericsson's biggest competitors include Nokia Siemens, a venture of Nokia Oyj and Siemens, China's Huawei Technologies Co and Alcatel-Lucent, which had also issued profit warnings this year.
Chief Financial Officer Hans Vestberg told investors he expected wireless network building projects to weigh on Ericsson's margins for the next several quarters. Such projects can take six to nine months, or even up to 12 months, he said.
Svanberg said that "in a perfect world" margins could improve in the second half of next year as the company starts new projects, but his reluctance to commit to a timeframe for improvements worried some analysts.
"It raised more questions than it provided answers," said RBC Capital analyst Mark Sue. "People are still trying to figure out where things might settle."
The double-digit percentage drop in the shares on Tuesday followed a plunge of 30 percent when Ericsson shocked the market with its third-quarter warning. It said it was receiving a greater share of sales from costly network projects and less than it had expected from more lucrative network upgrades.
Within days of the warning, Ericsson replaced CFO Karl-Henrik Sundstrom with Vestberg. It also promised to improve its ability to monitor business conditions and avoid such market shocks in future. (Additional writing and reporting by Adam Cox and Jerker Hellstrom in Stockholm: Editing by David Holmes, Paul Bolding; Editing by Gary Hill)
By: Sinead Carew
Friday, November 16, 2007
"Skyworks is uniquely suited to support the demanding system requirements of FEMTO cells given our technology breadth and depth," said Stan Swearingen, Skyworks' vice president and general manager of Linear Products. "In fact, the architecture being utilized for Samsung's FEMTO cell systems is an example of our ability to leverage proven and innovative technology across diverse markets."
Products entering volume production include, among others, the:
- SKY74068: highly integrated transmitter for dual-band CDMA applications operating in cellular CDMA, AMPS, and PCS modes. The only external components needed for operation are bias resistors, bypass capacitors, and passives for the PLL loop filter.
- SKY74092: a highly integrated CDMA/PCS LNA for dual-band and tri-mode. The device provides low noise amplification with high linearity to achieve a high dynamic range. Up to four gain steps of low noise amplification are supported through a three-wire read/write serial bus interface.
- SKY74100: a highly integrated receiver for tri-band CDMA applications with GPS capability.
- SKY77410: a load insensitive power amplifier (LIPA(TM)) module for WCDMA applications that meets stringent spectral linearity requirements with high power added efficiency for power output of up to 27.5 dBm, even with a load mismatch of 4:1 VSWR -- eliminating the need for an isolator.
SOURCE: Skyworks Solutions, Inc.
Friday, November 9, 2007
Local reports are suggesting that Ericsson could win the entire GSM network tender from India's BSNL as Nokia Siemens Networks (NSN) has not yet formally agreed to the terms from the company. The company had planned to split the 22.75 million GSM lines contract 60:40 between Ericsson and NSN. Ericsson's current allocation is worth around US$1.3 billion while NSN's is worth around US$954 million.
Nokia Siemens did originally tender at a higher cost than Ericsson, hence the smaller share of the tender - but is required to match Ericsson's price if it wants to take up the contract.
An unnamed BSNL executive told The Economic Times that if NSN failed to pick up the purchase orders within the next couple of days, another option would be to float a fresh tender.
When asked if BSNL would award the entire contract to Ericsson, BSNL chairman and managing director Kuldeep Goyal told the newspaper "I hope they (NSN) come around. However, if they do not agree, then we will have to explore other options".
BSNL's tender has been mired in controversy ever since it was sent for RFP last year. Initially the tender was for a massive 45 million lines, but the government blocked this and it was shrunk to just under 23 million lines. Then arguments with Motorola who claimed to have bid lower than Ericsson for the tender, but was disqualified from competing on technical grounds.
Under the terms of the final award, Ericsson bid the lowest figure - reported to be about US$91 per line. Nokia - prior to the infrastructure merger with Siemens had bid around US$177, with a significantly higher figure reported from Siemens. The merged company may be having difficulty in pulling down its costs to the level offered by Ericsson.
Wednesday, November 7, 2007
WESTCHESTER, IL, October 24, 2007—Andrew Corporation and Nokia Siemens Networks have agreed to revise their long-standing relationship in custom filter production. The agreement provides more design and manufacturing control to Nokia Siemens Networks, supported by Andrew’s research and development expertise, as it readies to market its next generation radio frequency filter products.
Under the agreement, Nokia Siemens Networks acquired the rights to all Andrew intellectual property related to Nokia Siemens Networks’ filter products for wireless networks. In addition, certain Andrew personnel in Italy will continue to provide engineering and technical work exclusively for the Nokia Siemens Networks products under an engineering services arrangement.
The companies also have agreed to rearrange their filter manufacturing relationship, including use of contract manufacturing partners. Nokia Siemens Networks assumes responsibility for the production of its own filter products currently done at an Andrew facility in Shenzhen, China, and by contract manufacturers in Eastern Europe. This arrangement also includes the transfer of production assets and inventories associated with Nokia Siemens Networks manufacturing operations. Andrew retains ownership of the cost-efficient, world-class Shenzhen facility and will expand filter production there on behalf of its other customers.
The transaction enables Andrew to increase its direct-to-operator channel focus while retaining a strong relationship with Nokia Siemens Networks, as well as other key original equipment manufacturers, which includes the supply of various other products and systems for wireless networks around the world.
“We are pleased that this agreement meets the needs of both companies, while continuing the strong supplier relationship we have enjoyed with Nokia Siemens Networks for many years,” said Mickey Miller, executive vice president and group president, Wireless Network Solutions, Andrew Corporation. “These moves will build a foundation for improved profitability and new opportunities for research and development services for Andrew. In addition, we are able to concentrate more resources and management time on areas of the business that offer more profitable growth opportunities.”