Ericsson first-quarter net income drops 30 per cent
Stockholm - Swedish telecommunications giant Ericsson on Thursday posted an increase in first-quarter 2009 sales - but net income fell dropped dramatically due to losses attributed to its joint venture Sony Ericsson.
Pre-tax income in the quarter totalled 3.3 billion kronor (400 million dollars), a 25 per cent decline year-on-year but better than analysts had predicted.
Net income - after losses and restructuring charges - dropped 30 per cent to 1.8 billion kronor while sales increased 12 per cent to 49.6 billion kronor, Ericsson said.
"Sales of network infrastructure are stable and the demand for professional services is growing," Ericsson chief executive Carl-Henric Svanberg said in a statement.
Commenting on the global economic downturn, Svanberg said, "The effects on the global mobile network market are so far limited."
Factors he mentioned included that "most operators have healthy financial positions, there is strong traffic growth and the networks are fairly loaded."
However, it was "difficult" to forecast how operators will act.
Svanberg said Ericsson would continue with its savings measures estimated to save some 10 billion kronor by second half of 2010.
At the end of the quarter the group had some 76,900 employees worldwide.
The joint venture Sony Ericsson that makes mobile telephones was formed 2001 with Japan's Sony.