Ericsson reports 43% decline in Q3 2012 profit

Telecoms

by CBR Staff Writer| 26 October 2012

Decline was due to curbed spending by operators in a faltering economy

Swedish firm Ericsson has reported 42% decline in its profit during the third quarter (Q3) of 2012 to SEK2.18bn ($325.9m), a decrease from SEK3.8bn ($568m) reported during Q3 2011.

Ericsson president and CEO Hans Vestberg said demand for Global Services and Support Solutions continued to be good, while Networks showed a decline in sales year on year.

"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," Vestberg said.

"The growing Global Services business contributes not only with top line but also with stable operating profitability and, together with Support Solutions, represented more than 50% of Group sales," added Vestberg.

Ericsson claims the decline was due to curbed spending by operators in a faltering economy and competition harmed subscriber growth.

During the period, the firm's revenue declined to SEK54.55bn ($8.15bn) from SEK55.52bn ($8.3bn), despite a 16% rise in sales in North America to SEK14bn ($2.09bn).

"There are now one billion smartphones in the world and the number is expected to reach three billion in 2017," Vestberg said.

"The introduction of new devices and applications put higher consumer demands on network performance and quality. This drives demand for our technology, software and services capabilities."

Comments
Post a comment

Comments may be moderated for spam, obscenities or defamation.
Privcy Policy

We have updated our privacy policy. In the latest update it explains what cookies are and how we use them on our site. To learn more about cookies and their benefits, please view our privacy policy. Please be aware that parts of this site will not function correctly if you disable cookies. By continuing to use this site, you consent to our use of cookies in accordance with our privacy policy unless you have disabled them.