Mobile & Wireless

Report

Analyst examines Ericsson and Motorola

Highlights restructuring as avenue for long term growth

by staff from releases

According to WallStreetEquityResearch.com, restructuring has been the key to success and survival in the telecommunications sector lately. LM Ericsson Telephone Company is nearing the end of a two year restructuring period and company president, Bert Nordberg, says the company is now "well positioned for long term growth." On the other hand, Motorola Inc. recently completed a $1.2 billion sale of its wireless equipment to Nokia Siemens Network in an effort to reshape the company.

LM Ericsson began restructuring in 2008. Since then, 4,000 employees have left the company. This has partially led to the company reducing annual operating costs by $1.1 billion. And as the restructuring period nears its end, dividends are beginning to emerge. Second quarter sales totaled $2.3 billion, a 4% increase since the same time last year.

While LM Ericsson restructured to improve profit margins, Motorola's recent sale to Nokia breathed life into the ailing company. Oppenheimer and Co. lauded the deal saying, "Motorola is taking more steps to separate their businesses and get fair market value -- a positive.'' Motorola has lagged behind in the competitive telecommunications world but this sale generates cash, sheds weight and allows them to focus more on areas where they have been successful.

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