Red ink flows at Ericsson
(01-31 17:16)
Ericsson, a leading provider of telecom equipment to global markets, reported that net profit plunged by half last year, hit by a charge for its joint venture ST-Ericsson, but was confident about prospects this year as operators boost capacity.
Ericsson said in December that it would book a charge of 8 billion kronor (HK$9.7 billion) after the announcement that French-Italian group STMicro was pulling out of ST-Ericsson.
The joint venture has not reported a single quarter of profits since 2009. In the fourth quarter of last year it reported a net loss of US$133 million.
In 2012, Ericsson made a net profit of 5.575 billion kronor on sales of 227.7 billion kronor, about the same as in 2011.
Chief executive Hans Vestberg said that the company should benefit in the second half of 2013 from projects by telecom operating companies to increase the capacity of their networks.
The results for the fourth quarter were hit hard by the outcome at ST-Ericsson which Ericsson is reportedly seeking to sell.
Ericsson reported a net loss for the quarter of 6.462 billion kronor.
Sales for the quarter were up by 4 percent on a 12-month basis to 66.93 billion kronor.
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