Ericsson has posted a 23% fall in first quarter profit as Chinese and Indian operators sharply cut network spending.
Earnings fell from 1.72 billion Swedish kroner ($174m) in 1Q09 to 1.26 billion in 1Q10, below consensus forecasts of 1.79 billion kroner, according to the Wall St Journal.
Operating profit of 4.5 billion kroner excluding joint ventures, was 3.3 billion short of forecasts made in a Reuters analyst poll.
Net sales fell 9% in the period, with India revenue down 43% as carriers paused investment ahead of the 3G auction, and China and northeast Asia sales off 15%.
CEO Hans Vestberg said tough market conditions during the second half of 2009 had continued in the first quarter of 2010, with “mixed operator investment behavior,” and a cautious approach by carriers in developing markets impacting sales.
“Sales were also impacted by tight industry component supply conditions,” Vestberg said.
He said equipment sales had fallen 14%, although global services sales were up 3% to 18.1 billion kroner, with managed services contributing 4.9 billion to the total, an increase of 17% on 1Q09.
The company did not post any guidance, but said “the fundamentals for long-term positive development for the industry remain solid.”
Ericsson’s Nasdaq stock closed Friday 9.77% higher at $12.36.