Ericsson profit down 2 percent in 2nd quarter | VailDaily.com
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Ericsson profit down 2 percent in 2nd quarter

STOCKHOLM, Sweden – Wireless equipment maker LM Ericsson posted a 2 percent drop in second-quarter profits Friday as it struggled to integrate the recent acquisition of Marconi.The Swedish company said net profit was 5.71 billion kronor ($781 million), down from 5.84 billion kronor in the second quarter of 2005.Earnings were hit by a charge of 400 million kronor ($55 million) related to the acquisition of Britain-based Marconi, which Ericsson bought for $2.1 billion in January.Sales rose 15 percent to 44.2 billion kronor ($6.04 billion) from 38.4 billion kronor in the year-ago period.The profits beat expectations, but sales came in slightly lower than analysts had forecast.Ericsson shares were flat at 23 kronor ($3.15) in Stockholm after recovering from a dip during early trading.Ericsson, the world’s No. 1 supplier of equipment for mobile networks, said it expected to maintain its dominant position despite consolidation among competitors in the industry.”As market leader our strategy based on organic growth and bolt-on acquisitions remains,” CEO Carl-Henric Svanberg said. “With our scale advantage and an organization focused on innovation and operational excellence, we are well positioned to continue to win market share.”Nokia Corp. and Siemens AG announced in June they would merge their telecom equipment businesses in a 50-50 venture. In April, Paris-based Alcatel launched a $13.4 billion stock swap for Lucent Technologies Inc.The Stockholm-based company’s earnings were buoyed by a strong quarter from Sony Ericsson, its joint handset venture with Sony Corp. Sony Ericsson last week said its profits nearly doubled to 143 million euros ($182 million) due to continued strong sales of its popular Walkman music phones.—On the Net:www.ericsson.se


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