Stockholm - Swedish telecommunications equipment maker Ericsson on Tuesday posted a 49-per-cent drop in operating income for second quarter 2008 partly impacted by ongoing cost cutting measures.

Operating income was 4.7 billion kronor (789 million dollars), down from 9.3 billion kronor in the corresponding business period 2007.

The group reported 48.5 billion kronor in sales for the quarter, up 2 per cent on the corresponding business quarter 2007 but a weak dollar rate impacted the group.

Net income was 1.9 billion kronor, down 70 per cent on second quarter 2007, the group said, adding that earlier announced cost cuts including plans to lay off some 4,000 employees impacted the group with 1.8 billion kronor in the quarter.

Chief Executive Carl-Henric Svanberg said in a statement that Ericsson's "overall business activity shows stable development."

Svanberg said that "with no major changes in the market environment, we still find it prudent to plan for a flattish mobile infrastructure market," referring to the group's mainstay networks operation.

Concerning markets, Ericsson said sales "continued to pick up" in the US, Western Europe remained "slow" and there was also growth in Latin America and Asia Pacific.

Ericsson also noted favourable development for its professional services division and the multimedia division showed good growth. (dpa)