Ericsson today reported a 35 percent fall in first-quarter net profit – due to weak results at its joint ventures Sony Ericsson and ST-Ericsson, as well as its own restructuring charges – but said the global economic downturn has so far had minimal effect on its core operation. The world’s largest mobile network infrastructure vendor said net profit in the quarter was SEK1.7 billion (US$210 million) compared with SEK2.6 billion in the same period a year ago. Sales increased by 12 percent to SEK49.6 billion from SEK44.2 billion. Ericsson said the fall in net income was due mainly to a pretax loss of EUR370 million at struggling mobile phone joint venture Sony Ericsson, as well as an operating loss at chipmaker ST-Ericsson of US$98 million for the venture’s first two months of operation (separately, ST-Ericsson announced yesterday the loss of 1,200 jobs as part of a restructuring plan). Restructuring charges related to Ericsson’s cost reduction scheme also weighed on the result by around SEK700 million.

The increase in sales, however, led CEO Carl-Henric Svanberg to keep a relatively optimistic view of the infrastructure market for 2009. “The effects of the global economic recession on the global mobile network market are so far limited,” he noted in a statement. “We have seen operators, in a few markets where local currencies have depreciated dramatically, postpone investments. Some operators are also more cautious with longer-term investments in fixed networks, such as rollout of fiber networks. Most operators, however, have healthy financial positions, there is a strong traffic growth and the networks are fairly loaded.” Meanwhile, the company believes “the fundamentals for longer-term positive development for our industry remain solid” and “the need for telecommunication continues to grow and plays a vital role for the development of a sustainable and prosperous society.”