Ericsson 'positive' despite profit drop

Swedish mobile-infrastructure and networking company Ericsson has announced its third-quarter figures four days early, revealing a substantial drop in profit that exceeded market expectations.

The company made 2.8bn kronor (£218m) in the third quarter of 2008, down 28 percent from 2007's 4bn kronor. This was largely due to a 2bn kronor restructuring charge, made by the company as part of its plan to cut annual costs by 4bn kronor. Sales went up from 43.5bn kronor to 49.2bn kronor for the same period, and margins increased slightly from 35.6 percent to 37 percent.

"During the quarter, sales grew by 13 percent, with strong development in all regions except Western Europe," said Carl-Henric Svanberg, president and chief executive of Ericsson in a statement. "Our business in the quarter has not been impacted by the financial turmoil. Our customers are generally financially strong. In addition, networks are loaded and traffic shows a strong increase. In the present financial turmoil, it is, however, hard to predict how operators will act and to what extent consumer telecom spending will be affected."

"We have a positive longer-term view for our industry. However, as we look into 2009, we continue to plan for a flattish market, and we have measures in place also for tougher conditions", he said.