Ericsson doubles net but misses estimates

Ericsson doubled its second quarter profit but fell short of analysts’ expectations, thanks to a downturn in carrier spending and a component shortage.

 

Network revenue was hit by stalled carrier investment in India, where the government has sought security clearances for all foreign network gear, and the winding down of China’s 3G rollout.

 

Ericsson’s net income of 1.88 billion kronor ($258m) was twice that of 2Q09, but below the 3.12 billion kronor forecast by analysts polled by Bloomberg.

Revenue was down 8% to 48 billion kronor, falling short of the 50.8 billion kronor Wall Street had expected.

 

A global components shortage and supply chain bottlenecks had cost the firm between 3 billion and 4 billion kronor in network sales during the quarter, the company said. 

 

North America was Ericsson’s sole growth market, with network revenue up 128% to 13.1 billion kronor as operators invested in capacity upgrades, while India and China sales were down 63% and 36% respectively.