Infrastructure giants Ericsson and Nokia both said that sales of LTE equipment in China were major contributors to revenue and earnings in the most recent quarter. Ericsson’s sales rose 9% year-on-year to $7.9 billion, while operating profit slipped 7% to $538 million. The company said that the profit decline was due primarily to revaluation of unrealized hedge contracts. The Swedish krona has been getting weaker versus the dollar, and Ericsson will lose money when it unwinds its six month hedge contracts. Roughly $110 million in currency losses were realized this quarter.
“If the currencies hadn’t been hedged we would have 800 million SEK ($110 million) better profit, hence we have a better underlying business result,” said Johan Wibergh, head of Ericsson’s networks business. Wibergh added that North America accounted for 22% of the networks business in the most recent quarter.
Nokia reported a 13% year-on-year increase in sales and a 33% increase in operating profit, before non-IFRS items. Net sales were $4.2 billion and non-IFRS operating profit was $579 million. Nokia has of course sold its device business to Microsoft, and now its three business units are Nokia Networks, its HERE mapping service, and its patent licensing business. Nokia Networks represented 88% of sales in the most recent quarter, and like the overall business saw sales increase 13% year-on-year.
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