Ericsson Records Drop In Q2 Sales

Ericsson Records Drop In Q2 SalesSwedish telecommunications giant Ericsson recorded lower second-quarter sales and operating income on account of continued shortage of industry components and careful investments from operators in some markets.

Company's net income after losses and restructuring charges remained up year-on-year to two billion kronor as against 800 million kronor in the last year.

Operating income exclusive of restructuring costs stood at 5.3 billion kronor, down 12%year-on-year but remained up 17%as compared to the first quarter of 2010.

The company's net sales declined 8%to 48 billion kronor.

"Sales were however impacted by continued industry component shortages and supply chain bottlenecks," chief executive Hans Vestberg said in a comment, adding that Ericsson estimated this affected sales in the quarter by three to four billion kronor.

Ericsson stated that operators in several developing markets were still precautious with investments, affecting the group's mainstay Networks division.

All regions, except North America, showed lower year-on-year sales in the quarter.

A cost saving plan had been completed in the second quarter. (With Inputs from Agencies)