Ericsson Q1 profit drops to $223 bn

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Ericsson Q1 profit drops to $223 bn

CEO Carl-Henric Svanberg says the effects of economic recession on global mobile network market are so far limited

Thursday, April 30, 2009

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STOCKHOLM, SWEDEN: Wireless equipment maker LM Ericsson reported today that its net profit for the first quarter ended March 31, 2009 fell by 30 per cent to 1.8 billion krona compared to 2.6 billion krona for the year-ago quarter.

While revenue rose 12 per cent to 49.6 billion krona, earnings per share came down to 0.54 krona a share, 35 per cent down compared to 0.83 krona a year earlier.

Chief executive officer Carl-Henric Svanberg said the effects of the global economic recession on the global mobile network market are so far limited.

"We have seen operators, in a few markets where local currencies have depreciated dramatically, postpone investments. Some operators are also more cautious with longer-term investments in fixed networks, such as rollout of fiber networks."

The Ericsson CEO said the cost reduction activities are running according to plan, targeting annual savings of 10 billion krona from the second half of 2010.

While announcing the fourth quarter result for the year 2008, the Swedish telecom equipment giant had announced 5000 job cuts as well.

"With our business mix, worldwide presence and early decision to cut costs, we are well positioned to strengthen our leadership in the present turbulent economic environment."

He said that the company's joint ventures, Sony Ericsson and ST-Ericsson, were affected by the economic downturn and the dramatic decline in consumer demand for handsets.

"Extensive programs to reduce costs are ongoing to adjust to the current market environment and restore profitability," he added. ©CyberMedia News

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