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Ericsson reports profit halved, sees telecom investment boost

Ericsson reports profit halved, sees telecom investment boost

By Agence France-Presse | Updated: 31 January 2013 15:56 IST

Ericsson, a leading provider of telecom equipment to global markets, reported on Thursday that net profit plunged by half last year, hit by a charge for its joint venture ST-Ericsson, but was confident about prospects this year as operators boost capacity.

Ericsson said in December that it would book a charge of 8.0 billion kronor (923 million euros, $1.25 billion) after the announcement that French-Italian group STMicro was pulling out of ST-Ericsson.

The joint venture has not reported a single quarter of profits since being created at the beginning of 2009. In the fourth quarter of last year it reported a net loss of $133.0 million.

In 2012, Ericsson made a net profit of 5.575 billion kronor on sales of 227.779 billion kronor, about the same as in 2011.

Chief executive Hans Vestberg said that the company should benefit in the second half of 2013 from projects by telecommunications operating companies to increase the capacity of their networks.

The results for the fourth quarter were hit hard by the outcome at ST-Ericsson which Ericsson is reportedly seeking to sell.

Ericsson reported a net loss for the quarter of 6.462 billion kronor.

Sales for the quarter rose by 4.0 percent on a 12-month basis to 66.936 billion kronor. This was better than the average of estimates by analysts polled by Dow Jones Newswires who had expected 65.66 billion euros.

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