OUTLOOK Ericsson Q1 pretax pre-ex loss 4.30-6.13 bln skr; job cuts expected

STOCKHOLM (AFX) - LM Ericsson AB is expected to report today a first quarter pretax loss of 4.300-6.130 bln skr excluding a capital gain of 5.50 bln skr from the sale of the company's remaining Juniper shares, according to survey of 17 analysts by SME.	    Analysts said that, together with the results announcement, the market will be seeking details of the 20 bln skr in cost cuts that Ericsson said in March it will implement by 2002. They added that a new round of redundancies is expected, with one analyst predicting that up to 10,000 jobs could be cut.	    Average market expectations are for a pretax loss of 4.968 bln skr, according to the survey.	    Ericsson reported a pretax profit of 6.195 bln skr a year ago, including a capital gain of 1.045 bln skr from the sale of part of the company's holding in Saraide. At the time, it gave no separate figure before extraordinaries.	    Johan Bergelv, Ericsson analyst at Hagstroemer & Qviberg, is expecting the company to post a first quarter pretax loss of 5.300 bln skr, excluding the Juniper capital gain, on sales of 59.9 bln. 	    Bergelv said the sale of Ericsson's remaining Juniper stake was the right decision for the cash-strapped company, but despite the proceeds from the stake sale and Ericsson's cost savings programme, he expects management to come under pressure from analysts and fund managers over the company's recent performance. 	    Ericsson chief executive officer Kurt Hellstroem has not faced analysts since the company gave its profits warning in March and announced the 20 bln skr in cuts, in addition to a 15 bln skr cost cutting programme announced along with its fourth quarter 2000 results.	    Jan Dworsky, Ericsson analyst at Cheuvreux De Virieu, said he is expecting a pretax loss of 5.050 bln skr on sales of 57.681 bln, while Hakan Persson, analyst at Aragon, expects a pretax loss of 4.475 bln skr on sales of 59.06 bln skr.	    Persson said Ericsson has suffered more than Nokia Corp from the downturn in the TDMA market particularly in Europe, as operators have sought to exit the standard in preparation for third generation mobile networks. TDMA, unlike GSM, is not compatible withis has hit Ericsson and other suppliers, but not Nokia of course," said Persson. 	    Analysts said the market's attention next Friday will be focused on details of the new 20 bln skr cost saving programme, and further information on prospects for the year ahead. 	    When the new round of cost cuts was first announced, the sketchy measures outlined were labelled as inadequate by analysts.	    Bergelv at Hagstroemer & Qviberg said: "I am expecting them to announce a lot of new job cuts, in the region of an extra 10,000 people."	    Persson at Aragon said he expects piecemeal measures by the company rather than far-reaching cuts. 	    Whatever measures are proposed, Persson is doubtful that the company will be able to realise anything like the 35 bln skr savings now earmarked. 	    "The restructuring announcement on Friday will relate to further piecemeal savings, but whatever they try I will be very surprised if they can achieve savings of 35 bln skr in eight months. However if they manage only half that amount it will still be impressive," said Persson. 	    Persson agreed with other analysts that job cuts may result in Ericsson losing momentum in research and development as well as sales, which will be difficult to redress at a later date.	    The earlier cost cuts announced at the time of its fourth quarter results are not expected to have anything more than a marginal impact on this quarter's figures.	    "It's more of a 2002 issue than this year, although I would hope to start seeing some benefit by the second quarter of this year, and a marginal impact in these results," said Dworsky. 	    Analysts noted that Nokia, which traditionally releases its results around a week after Ericsson, will now be reporting on the same dates as Ericsson. 	    "Perhaps they (Nokia) are seeking to draw the market's attention to some rather unflattering comparisons, from Ericsson's point of view," said one analyst.	    Analysts said Ericsson is expected to continue with its practice of providing earnings guidance for the following quarter, and some rather broader indications for the remainder of the year.	    "If they stopped (giving) these now it would be very suspicious indeed," said one analyst. 

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