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Ericsson Quarterly Profits Down by 42 Percent
Published on:
Ericsson has announced its third-quarter financial results and posted a 2 percent decline in revenues of SEK54.6 billion (US$8.16 billion) but a net profit that fell by 42 percent to SEK2.2 billion (US$329 million), impacted by lower profitability in its Networks division.
Networks decreased YoY due to weaker sales in parts of Europe, China, Korea and Russia as well as a halving of CDMA equipment sales. This was partly offset by strong development in North America. The acquired Telcordia operation added sales of SEK 1.1 b. in the quarter, split 50/50 between segments Global Services and Support Solutions.
"Demand for Global Services and Support Solutions continued to be good, while Networks showed a decline in sales YoY. In North America Networks sales developed favorably, despite the expected decline in CDMA sales, while parts of Europe, China, Korea and Russia continued to be slow," says Hans Vestberg, President and CEO of Ericsson. "The growing Global Services business contributes not only with topline but also with stable operating profitability and, together with Support Solutions, represented more than 50% of Group sales.
"Our joint venture ST-Ericsson is still in a challenging situation although performance improved in the quarter. Ericsson, together with STMicroelectronics, is continuously reviewing the strategy and business case. We remain confident that ST-Ericsson has a strategic position in the industry to enable the device ecosystem." he added.
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