The world's largest mobile-phone infrastructure vendor Ericsson saw its second-quarter profit plummet by 70 percent because of costs associated with cutting jobs and the struggles associated with its Sony Ericsson handset joint venture, which reported a whopping 97 percent drop in second-quarter profit last week, causing the JV to cut 2,000 positions. The vendor's net income fell to $320 million from $1.07 billion a year ago. Revenue increased 2 percent to $8.1 billion in the quarter.
"The overall business activity shows stable development," said Carl-Henric Svanberg, president and CEO of Ericsson. "With no major changes in the market environment, we still find it prudent to plan for a flattish mobile infrastructure market in 2008 and our focus on adjusting our cost base remains."
Network sales fell 1 percent year-over-year as the continued decline of the U.S. dollar contributed negatively to sales, Ericsson said. Still, said the vendor, there is a steady demand for GSM equipment in high-growth markets such as Asia, which is driving the growth for network rollout services.
For more:
- see Cellular-News [1]
Related stories:
Sony Ericsson's 2Q profits sink, 2,000 workers cut. Sony Ericsson story [2]
Sony Ericsson issues profit warning. Sony Ericsson profit warning story [3]
Links:
[1] http://www.cellular-news.com/story/32554.php
[2] http://www.fiercewireless.com/story/sony-ericssons-2q-profits-sink-2-000-workers-cut/2008-07-18
[3] http://www.fiercewireless.com/story/sony-ericsson-issues-profit-warning/2008-06-27