Ericsson: Carrier cutbacks hinder Q4 09 performance

Ericsson's Q4 09 earnings reflect the challenges all telecom equipment vendors faced as service providers continued to cut back on network spending throughout 2009, while ongoing cost cutting helped stem a bit of the bleeding.

Ericsson reported full 2009 profits decreased 65 percent to $570 million, while Q4 profits decreased 82 percent to $97 million. The Swedish vendor's network unit revenue declined 16 percent year-on-year.

However, Ericsson is not the only telecom vendor that faced a challenging market in 2009--one that analysts believe might not see any signs of real growth until 2011.

Competitors such as Alcatel-Lucent forecast that growth will either remain flat or grow a paltry 5 percent in 2010, while Nokia Siemens Networks does not believe they'll see any growth this year.

"These results show how challenging network vendors have found 2009," CCS Insight analyst Paolo Pescatore said in Reuters article. "Despite this, Ericsson remains as one of the relatively few companies to be able to survive due to its scale and legacy position in the marketplace."

For more:
- Light Reading Europe has this analysis [1]
- Reuters also has more perspective [2]

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