Ericsson misses 1Q targets, as network sales fall
Ericsson’s 1Q10 results fell short of analyst expectations, as the firm reported an identical 9% fall in sales to Finnish rival Nokia Siemens Networks (see separate story.)
Net profit fell from 1.72 billion Swedish kroner (€179 million) in 1Q09 to 1.26 billion in 1Q10, well below analyst forecasts of 1.79 billion kroner, according to the Wall St Journal.
Sales of 45.1 billion kroner were also a far cry from predictions the firm would hit 49.5 billion in 1Q10, WSJ said.
Operating profit of 4.5 billion kroner excluding joint ventures, was 3.3 billion short of forecasts made in a Reuters analyst poll.
Hans Vestberg, President and CEO of Ericsson said tough market conditions during 2H09 had continued in the first quarter of 2010, with “mixed operator investment behaviour,” and a cautious approach by carriers in developing markets impacting sales at the Networks business.
“Sales were also impacted by tight industry component supply conditions,” Vestberg said.
Global services sales were up 3% to 18.1 billion kroner, with managed services contributing 4.9 billion to the total, an increase of 17% on 1Q09.
Analysts predicted in March that Ericsson’s heavy reliance on China for infrastructure sales could lead to problems, as carriers in the country looked to cut expenditure during 2010.