Ericsson down on sluggish outlook

L.M. Ericsson announced that it brought in a net income of $1.4 billion in the most recent quarter, representing a 14-percent rise over the same quarter a year ago. Despite the Swedish company’s success as the largest maker of mobile-phone networks, largely buoyed by record earnings at its handset joint venture with Sony, it cautioned that the market for mobile equipment may slow this year.
The company lowered its outlook from “moderate” growth to “mid-single digit” growth, which prompted disappointment among several analysts. Ericsson shares have slid almost 7 percent on the news.
However, Ericsson added that there is potential for growth in other areas besides network equipment, as it is increasingly helping operators manage their networks throughout Western Europe.
The bulk of the company’s success during its most recent quarter came from mobile-phone maker Sony Ericsson Mobile Communications L.P., where a tripling of profit increased Ericsson’s earnings by almost $289 million.