U.S. News

Ericsson Profit Rises 27% on Strong European and Asian Sales

Wireless equipment maker Ericsson said Thursday its net profit grew 27% during the first quarter, boosted by stronger sales in western Europe and Asia.

The Stockholm-based company said net profit for the three months ending March 31 came in at 5.8 billion kronor ($862 million), or 0.37 kronor ($0.05) per share, compared with 4.6 billion kronor, or 0.29 kronor per share, for the same period last year.

Sales were up 8%, at 42.2 billion kronor ($6.27 billion), thanks in part to a 36% hike in revenue in Asia as demand grew for GSM networks in China, Ericsson said. Sales were also up in Europe, but declined by 41% in North America, the company said.

In 2006, North America sales were boosted by a large contract to upgrade Cingular Wireless's network to third-generation technology.

Sales also declined in Latin America, but Ericsson said the region is showing "signs of recovery," especially in the key markets of Mexico and Brazil.

"We have concluded another quarter with solid performance and market share gains in a stable growth environment," Chief Executive Carl-Henric Svanberg said.

Ericsson, the world's largest maker of wireless networks, said it expects fixed and mobile traffic to continue growing over the coming years, especially for multimedia and data services.

The company said mobile data traffic tripled during 2006, and is expected to exceed voice traffic within four years.