Ericsson's profit plummets 70%

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.

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