by Jean Liou
STOCKHOLM, July 21 (AFP) - The Israeli army was probing the killing of two of its soldiers Wednesday by Lebanon-based Hezbollah snipers as the senior officer for the northern command issued a warning to Syria if attacks continue.
Ericsson, which emerged from 10 consecutive quarters in the red last year, clearly established its position back in the black by posting a net profit of 5.3 billion kronor (576 million euros, 711 million dollars) in the April-May period. That compares to a loss of 2.7 billion kronor in the same period a year ago.
Pre-tax profit amounted to 7.8 billion kronor, up from a loss of 3.6 billion in the same period a year earlier and well above average market expectations of 5.36 billion.
Ericsson's gross margin was 47.8 percent in the second quarter, compared with 35.1 percent in the same period last year, and well above analysts' expectations of 44.8 percent.
"The company was in deep crisis not long ago, and Ericsson's upswing has been just amazing ... It truly has been a fantastic turnaround case," Mika Metsalae, a telecom analyst with Helsinki brokerage firm Kaupthing Sofi, told AFP.
"This was an extremely strong report no matter which way you look at it," Haakon Wranne, an analyst with Fischer Partners in Stockholm, agreed.
"Ericsson has concentrated on bringing down costs and increasing sales. It's the double-barrelled effect of those to efforts that brought such strong results," he told AFP.
The company's own stock surged on the news, jumping 7.8 percent in late afternoon trading to 23.50 kronor (3.14 dollars, 2.56 euros) on the Stockholm Stock Exchange.
And a week after mobile phone giant Nokia in neighboring Finland sent tech stocks tumbling on its dismal results and even bleaker forecasts, Ericsson's upbeat report helped send global tech stocks higher, with the CAC-40 jumping 45.25 points at 3,652.64 on volume of 1.241 billion euros mid-day.
The company posted second-quarter sales of 32.6 billion kronor, up from 27.613 billion. Orders increased to 33.1 billion from 28.3 billion.
Ericsson also reiterated its outlook, given in the first quarter, for moderate growth in the systems market this year.
"We estimate that the global mobile systems market in 2004, measured in dollars, will show slight to moderate growth, compared to 2003. There is also an element of operators catching up on previous years' limited investments," the company said in a statement.
The company said it also maintained its view that the addressable market for professional services, also measured in dollars, would continue to show good growth this year.
"Confidence has returned to the industry. 3G rollouts, GSM capacity expansions as well as EDGE upgrades creates momentum for us," Ericsson CEO Carl-Henrik Svanberg said in a statement.
"I think the conditions are favorable for Ericsson to keep on succeeding," analyst Wranne said.
The company said that its share from Sony Ericsson's second-quarter pretax profit was 500 million kronor.