Ericsson has sent its shares soaring with much-better-than-expected second-quarter results and a pledge to return to profit this year despite a falling market.
Shares in the Swedish telecoms equipment maker, the world's biggest producer of mobile networks, rocketed 22 per cent in early trade to 10.70 crowns, beating the DJ Stoxx European technology index by some 20 percentage points.
"We can conclude that we have the financial crisis now behind us. We are on steady ground," chief executive Mr Carl-Henric Svanberg said. He added that the order inflow was stabilising and that the wider market had hit bottom.
Ericsson has been grappling with a spending freeze from telecoms operators for more than two years, more than halving its workforce, selling off non-core businesses and changing management four times in five years.
Ericsson cut its pre-tax loss to 200 million crowns, adjusted for one-off items, in the April-June period compared with a 3.1 billion crowns loss a year ago and a consensus forecast of a two billion crown loss.
To see it through the industry downturn, the company made a $3.2 billion rights issue in 2002. After 11 successive quarters in the red it finally seemed close to profitability, excluding restructuring costs. "We remain determined to return to profit during 2003," Mr Svanberg said.
Ericsson reiterated its outlook that demand for mobile networks this year was likely to decline by more than 10 per cent in dollar terms against 2002 - a similar one to that of arch-rival Nokia and US competitor Motorola.