Ericsson suffers drop in profits

smsThe Swedish mobile phone giant, Ericsson, has suffered a 30 percent drop in its first quarter net profits compared to the same period in 2008. The world’s leading supplier of mobile phone network equipment is still managing to beat the gloomy predictions of market analysts, however.

From January to March, Ericsson posted a net profit of 1.8 billion kronor compared to 2.6 billion kronor in the first quarter of 2008. The company’s operating profit fell 49 percent during the same period year-on-year, from 3.5 billion kronor in 2008 to 1.7 billion kronor this year, according The Local newspaper.

Ericsson’s chief executive Carl-Henric Svanberg remained upbeat despite the sharp drop in profits, stating: “The effects of the global economic recession on the global mobile network market are so far limited. It remains difficult to more precisely predict how operators will act in the current climate. But if we look at Ericsson’s core operations, then profit has actually increased by 40 percent.”

Ericsson has already implemented cost-cutting programmes that are on track, and Svanberg confirmed that the company was not planning any further cuts. “Unless the nature of the crisis dramatically changes then there should not be any dramatic changes in the market,” he predicted.

Even so, Ericsson’s stock value fell by 5 percent on the Stockholm market on the back of the disappointing profit news.