Ericsson, the Swedish firm that leads the global market for mobile network technology, has posted its seventh straight quarterly loss.

But the firm insisted that its performance was starting to stabilise, and that demand in its long-depressed market could pick up soon.

Ericsson made a pre-tax loss of 2.2bn kronor (£157m; $257m) during the last three months of 2002, more than expected but much less than the 3.9bn-kronor loss recorded a year earlier.

Its sales were down by 23% during the quarter, and by 36% for the year as a whole, hammered by collapsing investment among its mobile operator clients.

The rapid pace of cost-cutting - including the loss of another 7,100 jobs, or 10% of its staff, during the quarter - meant the firm was on track to return to profitability this year, Ericsson said.

'Starting to stabilise'

The firm reiterated its view that the global mobile market would contract by 10% this year.

But Kurt Hellstrom, Ericsson's chief executive, said he was cautiously optimistic.

"The sequential increase in sales and orders is more a factor of seasonality than an indication of a market recovery," he said.

"However, with orders and sales at expected levels, good progress in our restructuring and positive cash flow, our fourth quarter results indicate that our business is beginning to stabilise."

Gloomy reaction

Its optimism notwithstanding, Ericsson's shares were down by 5.5% shortly after the start of trading.

While some analysts sought comfort in the fact that the decline in sales was slowing, others insisted there was nothing else to cheer.

"There were no big surprises in the report, but it was a little worse than expected," said Urban Ekelund from Redeye.

"Ericsson says that the worst is over, but I'm not sure if you can trust that."

Ericsson's results are seen as especially poor in relation to Finnish rival Nokia, which recently unveiled a doubling in net profits.

Unlike Ericsson, which focuses on the technology behind mobile networks, Nokia concentrates mainly on handsets, which have seen a modest rebound in recent months.