Ericsson has reported a 57% drop in its net profit for the second quarter of 2009, due to the impact of global economic crisis on the mobile infrastructure market.
The company posted net income of SEK831m or SEK0.26 a share for the second quarter of 2009, compared with SEK1.9 billion or SEK0.59 a share, for the same period last year.
Carl-Henric Svanberg, president and CEO of Ericsson, said: There are different trends in the current market environment. The effects of the global economic climate on the mobile infrastructure market are now more notable, especially in markets with currencies under pressure and tougher credit environment.
Sales during the period were SEK52.1 billion, up 7%, compared to sales of SEK8.5 billion for the same period a year-ago. The exchange rate fluctuations accounted for a 3% fall. The company also incurred restructuring charges of SEK3.6 billion during the quarter.
However, Svanberg added: At the same time the consumer demand for new services and broadband capabilities are quickly accelerating and roll out of new technologies is ongoing in the world’s leading economies. There is also an increasing demand for professional services from operators across the world.”
Adjusted cash flow amounted to SEK9.9, compared to SEK8.7 billion. The company said that improvements in cash flow was mainly due to strong collections and improved working capital efficiency.
Svanberg said: “We continue to focus on our capital structure and have added long-term loans on favorable conditions. Our net cash position was further strengthened by a strong cash flow in the quarter.”
