Quarterly profit at Ericsson has slumped by 35% year-on-year
as the vendor felt the impact of costs associated with 5,000 job
cuts across the business.
All told, the Swedish communications giant made net profit of
SEK540m (£45.2m), although sales were up 12% on this time last
year, hitting SEK49.6bn.
In spite of a torrid fiscal Q1, Ericsson put on a happy face
today, as president and CEO Carl-Henric Svanberg said that the firm
was still growing ahead of the market.
"Sales of network infrastructure are stable and the demand for
professional services is growing. The effects of the recession on
the global mobile network are so far limited," he said.
"We have seen [some] operators postpone investments. Some are
also more cautious with longer-term investment in fixed networks.
Most, however, have healthy financial positions, there is strong
traffic growth and the networks are fairly loaded," he
continued.
Meanwhile, Ericsson's previously announced cost-cutting
activities are continuing, according to Svanberg, who is targeting
annual savings of SEK 10bn from the second half of 2010.
The company's joint ventures, Sony Ericsson and ST-Ericsson,
which are both suffering from a dramatic decline in consumer demand
for mobile handsets, are bearing the brunt of this restructuring
activity.
This story originally appeared on
Microscope.