Ericsson profit soars four-fold to $538 mn

Swedish telecom equipment maker Ericsson has reported an over four-fold jump in net income to 3.6 billion Swedish kronor ($538 million) for the third quarter on improved earnings from Sony Ericsson JV and less restructuring charges.

The company had a net income of 810 million Swedish kronor for July-September quarter of 2009, Swedish giant Ericsson said in a statement.

"Net income increased year-over-year and sequentially mainly due to improvements in operational results and Sony Ericsson earnings as well as less restructuring charge s," the company said.

Ericsson's net sales inched up two per cent from the year earlier to 47.5 billion Swedish kronor for the third quarter ended September 30.

"Group sales in the quarter increased two per cent year- over-year and was almost flat sequentially, negatively affected by a strong SEK," Ericsson President and CEO Hans Vestberg said.

Ericsson said its sales from Indian operations fell 49 per cent year-over-year, while increased 58 per cent sequentially.

During the quarter, India gradually improved with 2G deliveries and in the 3G vendor selection.

In the 3G vendor selection, Ericsson has maintained its market share and during the quarter Bharti Airtel awarded the majority of their 3G circles to Ericsson.

The company said its overall networks sales grew six per cent year-over-year with a continued transition from voice to data related business.

Global Services sales grew 3 per cent year-over year and accounted for some 40 per cent of total sales.

Besides, Sony Ericsson Mobile Communications AB, a joint venture between Sony Corp and Ericsson, posted third-quarter net income of 49 million euros ($68 million), even as sales were hit by component shortages.

Ericsson also reported restructuring charges, excluding JVs of 900 million Swedish kronor, compared with 2.7 billion Swedish kronor in the previous year.

Ericsson was hurt from slow spending in the wake of the global financial turmoil, and from shortages of some components for its gear, such as base station semiconductors.