Mobile telecom equipment maker Ericsson reported lower-than-expected first-quarter profit and sales today as operators in many regions remained cautious about investment.
The telecom equipment market contracted sharply in 2009 as the global downturn crimped operator
spending. As yet there are few signs of recovery.
The majority of analyst forecasts are for meagre market growth at best in 2010 and for competition -
especially from Chinese vendors - to remain fierce.
Ericsson's operating profit, excluding joint ventures and restructuring costs, was 4.5 billion Swedish
crowns ($625 million) against a forecast of 4.8 billion in a Reuters poll of analysts and 4.7 billion in the year-ago period.
Sales were 45.1 billion crowns versus a forecast of 48.4 billion.
"The market conditions we saw in the second half of 2009 prevailed also in this quarter with mixed operator investment behaviour across regions and markets," chief executive Hans Vestberg said in a statement.
He said operators in developing markets were still cautious with their investments which hit sales in the key networks unit.
Rival Nokia Siemens Networks repeated yesterday it expected no growth in the equipment market this year in euro terms. Cost cuts helped it swing to a small, but unexpected, profit in the first quarter but its sales were down.
Reuters