Citing the effects of a $303 million loss in its Sony-Ericsson joint venture and ongoing restructuring charges, Ericsson reported its second-quarter net profit dropped by 61 percent year-over-year to $481 million. For the three months ending June 30, Ericsson reported revenues of $7 billion and net income of $107 million.
Ericsson's outgoing Chief Executive Carl-Henric Svanberg said that while selling wireless equipment into emerging markets has been challenging, he is seeing strong demand for consumer services. "Consumer demand for new services and broadband capabilities are quickly accelerating," he added.
In addition to broadband, professional services were a bright spot for Ericsson. The company reported that services accounted for about 38 percent of the company's total revenues. Buoyed by large contracts from major service providers such as Sprint, Ericsson said professional services revenues totaled $1.89 billion, while "network rollout" services accounted for $790 million. Svanberg stated that the company has dedicated 7,000 employees to "consulting and integration."
In other news, Ericsson has been named the winning suitor for Nortel's CDMA assets. The Swedish telecom vendor bought the troubled Canadian vendor's wireless assets for $1.13 billion in a bankruptcy auction. Ericsson not only gains access to Nortel's North American CDMA and LTE businesses, which reportedly generated $2 billion in revenues in 2008, but also to Nortel's customers and intellectual property.
For more:
- here's the official release
- Dow Jones has this article
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