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Ericsson Names New CEO, Share Jumps
Thu February 6, 2003 04:19 AM ET

STOCKHOLM (Reuters) - Loss-making telecoms equipment maker Telefon AB LM Ericsson named Carl-Henric Svanberg as its new chief executive on Thursday, ending months of speculation and driving its battered stock more than 10 percent higher.
Svanberg, currently CEO of the world's leading lock maker, Assa Abloy, will take over as Ericsson CEO from Kurt Hellstrom on April 8, Ericsson said in a statement.

Hellstrom became president of Ericsson in 1999 and CEO from the start of 2001. Analysts welcomed the move and at 4 a.m. EST, Ericsson's share was 11 percent higher at 6.55 Swedish crowns.

"Ericsson's appointment of a new CEO is great news for the stock. He was previously CEO at Assa Abloy and was well respected there," said one telecom equipment analyst in London.

"The incoming CEO has a reputation for excellent cost cutting and acquisition integration and cost-cutting is very much needed at Ericsson," the analyst added.

Assa Abloy stock fell 10 percent in Stockholm on disappointment that the CEO was going and as the company's fourth-quarter results came in just below forecast.

Ericsson, the world's leading maker of mobile telecoms network infrastructure, has posted losses for the past nine quarters as debt burdened telecoms operators have reduced investments in networks.

Its stock tumbled more than 20 percent earlier this week after the company reported weaker-than-expected fourth-quarter earnings and said it expected a further fall in sales this year.

Svanberg, who has been among the potential candidates mentioned by financial market analysts, "will continue ... Hellstrom's successful work in controlling Ericsson's costs, while keeping up our leading market position," Ericsson Chairman Michael Treschow said in the statement.


http://www.reuters.com/financeNewsArticle.jhtml?type=businessNews&storyID=2179430