Ericsson's Net Profits Drop 74%

Company hit by difficult market conditions, but margins remained steady

Telecom equipment giant Ericsson reported on Oct. 22 worse-than-expected third quarter results, with a 74% fall in net profit blamed on falling sales and problems at its Sony Ericsson venture.

Ericsson, the world number one mobile network firm, said net profit in the three months to September fell to 810 million kroner (US$ 120 million).

Sales fell 6% from a year earlier to 46.4 billion kroner, Ericsson said, hit by difficult market conditions, but margins remained steady.

"The economic climate continues to affect the telecom infrastructure market and credit supply remains difficult in several emerging markets. However, other markets, including the major economies such as China, India, the U.S. and Japan are developing well," Ericsson said.

Ericsson has suffered from the difficulties at Sony-Ericsson and at ST-Ericsson, a joint venture with ST Micro, which together chalked up charges, mostly for restructuring, of 1.5 billion kroner in the third quarter.

The company, which announced 5,000 job losses at the end of last year, said its cost cutting program was ahead of plan.

Copyright Agence France-Presse, 2009

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