Ericsson records third quarter profit rise

The fortunes of Swedish equipment vendor Ericsson look to be on the change, with the announcement Thursday that the company has recorded its first increase in profit this year.

Bolstered by a strong performance from its handset joint venture with Sony and an increased interest in the mobile broadband sector, net income for the third quarter increased to SEK6.2bn (£451m), up from SEK5.3bn in the same quarter a year ago.

Net sales at the manufacturer were up 12 per cent year on year, reaching SEK40.8bn in the third quarter 2006, compared to SEK36.2bn in 2005.

“We see continued positive business momentum and accelerating focus on broadband,” said Carl-Henric Svanberg, president and CEO of Ericsson. “For billions of people mobile broadband will be the way to reach high-speed connectivity and access to the internet. This will cause a significant increase in voice and data traffic in the world’s networks. Traffic in mobile networks is expected to quadruple in the next five years and there is even stronger growth expected in fixed broadband,” Svanberg said.

Last week, the handset joint venture Sony Ericsson recorded a strong performance by attaching the Cyber-shot and Walkman brands of its Japanese parent to its mid and high end phones.

The mobile phone manufacturer on Thursday reported that net income for the third quarter almost tripled over the past year, shooting up to Eur298m (£201m), compared to Eur104m a year ago.

Unit sales were also up 43 per cent year on year with the company shifting 19.8 million devices, while revenues increased 42 per cent to Eur2.9bn.