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Ericsson Q3 Profit Down Despite Higher Sales(dpa-AFX International Compact Via Acquire Media NewsEdge) STOCKHOLM (dpa-AFX) - Swedish mobile network equipment maker Ericsson (ERIC) reported Friday a decline in the third-quarter profit, reflecting effects from hedge contracts and higher operating expenses. Sales, however, increased on strong performance in the Middle East, China, India and Russia, despite weak North American results. For the third quarter, net income attributable to stockholders of the parent company declined to 2.65 billion Swedish kronor ($364.97 million) from last year's 2.92 billion kronor. Earnings per share were 0.81 krona, down 10 percent from last year's 0.90 krona. Excluding amortizations and write-downs of acquired intangible assets, and restructuring, earnings were 1.11 kronor per share, down 15 percent from 1.31 kronor a year earlier. Operating income fell 8 percent year-over-year to 3.9 billion kronor, mainly driven by revaluation of unrealized hedge contracts of 1 billion kronor, compared to 0.8 billion kronor last year. The results were also hurt by higher operating expenses related to modems and the acquired Mediaroom business as well as planned ramp up of investments in IP. Sales in the quarter were 57.6 billion kronor, 9 percent higher than prior year's 53 billion kronor. Sales for comparable units, adjusted for currency, grew 3 percent. Sequentially, sales increased 5 percent on a reported basis. In North America, business activity slowed down as operators currently focus on cash flow optimization. On a negative note, political unrest prevails in many parts of the world, especially in the Middle East and Northern Africa. In the quarter, mobile broadband sales increased as the firm started to deliver on previously communicated key contracts, in Mainland China and Taiwan, and with improving sales in Japan. During the quarter, the company decided to stop all further development of modems and shift some R&D resources from segment Modems to Networks to pursue growth opportunities in the radio business. Hans Vestberg, President and CEO, said, "We continue to execute on our strategic agenda; to improve our profitability in the core business in order to invest in targeted areas such as IP networks, Cloud, TV & Media and OSS & BSS." In Stockholm, Ericsson shares closed Thursday's trading at 85.55 kronor, up 1.30 kronor or 1.54 percent. Copyright RTT News/dpa-AFX |