Ericsson announced a drop in sales, with a “major decline” in its CDMA sales as well as reduced operator spend in areas with “macroeconomic or political uncertainty,” although its profit benefited from the disposal of its stake in Sony Ericsson.
Hans Vestberg, president and CEO, said: “sales of high-performance mobile broadband developed well in North America, Japan and Korea, while other regions such as Europe including Russia, parts of Middle East and India were weaker.”
The company reported a net income of SEK8.8 billion (US$1.3 billion), up 116 percent year-on-year from SEK4.1 billion, on sales of SEK51 billion, down 4 percent from SEK53 billion. The company noted that the bottom line was affected by a gain from the Sony Ericsson divestment of SEK7.7 billion, partially offset by a SEK1.4 billion loss at ST-Ericsson.
Sales of the networks business fell by 18 percent to SEK27.3 billion from SEK33.2 billion.
Ericsson said its underlying business mix, with a higher share of coverage and network modernisation deals rather than capacity projects, was unchanged. This is also expected to remain in the short term.
Vestberg noted that in the quarter, the company “took important steps” in execution of its strategy, including the acquisition of carrier Wi-Fi player BelAir and the sale of its Sony Ericsson stake. It also increased its stake of South Korean joint venture LG-Ericsson.
Earlier this week, ST-Ericsson, the company’s silicon joint venture with STMicroelectronics, announced its new strategic direction, intended to turnaround a long period of underperformance.