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STOCKHOLM: Ericsson, world leader in mobile phone network equipment, reported a 70-percent collapse of net profit for the second quarter on Tuesday, and a two-thirds fall in operating margins.
The group said it had been hit by slowdown in western Europe, weakness of the dollar and restructuring charges, and it expressed caution for performance for the whole of this year.
Net profit fell to 1.9 billion kronor (201.3 million euros, 320.6 million dollars) from 6.4 billion kronor in the same period of last year.
But sales rose by 2.0 percent to 48.5 billion kronor.
However, operating profit fell by 69.0 percent to 2.889 billion kronor and the operating margin, a ratio of operating profit to sales, slumped to 6.0 percent from 19.4 percent.
The group, which has been restructuring its activities since the last quarter of last year, said that sales on a constant exchange rate basis had risen by 7.0 percent.
The sales figures exceeded expectations by analysts who had forecast about 47.5 billion euros, a consensus poll by Dow Jones Newswires found.
Chief executive Carl-Henric Svanberg said that overall activity had remained stable. Sales continued to rise in the United States but were weak in western Europe, the group's main market, he said.
- AFP/so
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