Ericsson predicted that the market for network gear will grow 3 percent annually or more in the years ahead, and said the fundamentals of its business remain solid.
Ericsson reported weaker sales year-over-year in the third quarter and the company warned that it is facing pressure overall and that sales have fallen in North America as major LTE projects have peaked.
Ericsson reported weaker than expected profits, sales and margins for the second quarter, as it was hit by one-time charges and strong headwinds in Asia. While North America continued to be a bright spot for the vendor, CEO Hans Vestberg said he is looking to China and Europe as engines for growth in the years ahead.
Ericsson reported a bigger decline in profit than analysts expected in the first quarter of 2013, but the Swedish equipment manufacturer said the quarter was in line with its own expectations and expects softer areas of development to balance out over the year.
BARCELONA, Spain—Infrastructure vendor Ericsson kicked off the 2013 Mobile World Congress trade show with some bold predictions, including the forecast that 90 percent of network traffic will be video.
Ericsson surprised analysts by reporting fourth-quarter sales figures above estimates helped by North American orders rising sharply to €1.97 billion the fourth quarter, a 51 per cent increase. overall net sales grew 5 per cent year-over-year to €7.77 billion.
Ericsson posted a net loss for the fourth quarter due to an expected write down from its ST-Ericsson joint venture, but the networking giant also reported rising revenue and strong results from the North American market, which cheered investors.
Ericsson said it will take a $1.2 billion charge in the fourth quarter related to its money-losing chipset joint venture with STMicroelectronics, ST-Ericsson, as it explores future options for the company.
Ericsson said its profit in the third quarter fell by 43 per cent as operators around the world curbed spending on network equipment.
Ericsson reported that its net profit declined 43 percent in the third quarter as weaker network sales and cautious operator spending weighed down its results. Slimmer profits from large-scale network modernization projects weakened the company's margins, and weaker sales in key regions depressed earnings, but the Swedish vendor got a boost from strong North American sales.