JVs hurt Ericsson bottom line

 

Ericsson has blamed a 30% fall in first quarter profit on weak results from its handset and chip joint ventures.
 
The wireless leader reported net income of 1.8 billion kronor ($224.4 million), even as revenue grew 12% to 49.6 billion kronor.
 
The company was weighed down by the poor performance of its joint ventures, said CEO Carl-Henric Svanberg.
 
“Sony Ericsson and ST-Ericsson are affected by the economic downturn and the dramatic decline in consumer demand for handsets,” Svanberg said.
 
Without the JVs, Ericsson’s operating margin improved from 7.6% to 9.5%, Ericsson said.
 
ST-Ericsson, its new joint venture with STMicroelectronics this week reported a $347 million loss  and Sony Ericsson doesn't expect  to return to profitability until the end of the year.
 
Svanberg said it was difficult to “predict how operators will act in the current environment.”
 

“However, investments in wireless networks largely continues, and rollouts of new networks and new technologies accelerate in markets such as the US, China and India.”

 

Suggested Articles

Wireless operators can provide 5G services with spectrum bands both above and below 6 GHz—but that doesn't mean that all countries will let them.

Here are the stories we’re tracking today.

The 5G Mobile Network Architecture research project will implement two 5G use cases in real-world test beds.