STOCKHOLM, Sweden-Calling its third quarter financials solid, L.M. Ericsson reported a net profit of $672.8 million, a 22-percent increase from results a year ago when the company reported a net profit of $545.7 million. The company’s third-quarter earnings per share stood at 4 cents, up 33 percent from last year’s earnings per share of 3 cents.
“Solid is a bit of an understatement here,” said Martin Garner, director of wireless intelligence at Ovum. “These are good results.”
Garner said the high points of Ericsson’s earnings report were mobile networks growth of 14 percent from the first nine months of last year-despite a slowdown of investments in China-largely driven by W-CDMA rollouts; the 25 percent year-on-year growth of professional services; and the way in which operating margins have improved even though a lot of the growth is in emerging markets, where it was feared price competition would be destructive.
“The market continues to show good development with growth in mobile voice and data, broadband and in emerging markets in general,” said Carl-Henric Svanberg, president and chief executive of Ericsson. “The 2 billion reported subscriber mark was passed in the quarter and 3 billion should be passed within five years. In parallel, usage is fueled by increased tariff competition and new service offerings.”
Ericsson said the traffic growth in the world’s mobile networks is expected to continue as a result of both new services and new subscribers, and that for 2005, the company continues to believe that the global mobile systems market will show moderate growth compared with 2004. In 2006, the company said the global mobile systems market will show moderate growth compared with 2005.
In addition, the company said it maintains its view that the addressable market for professional services will show good growth.
