Equipment Makers Ericsson, NSN Both Show Q1 Profit

Telecom networking equipment maker Ericsson (ERIC), the world’s largest thanks to the takeover of Nortel Networks’ wireless unit, saw lower profit in the first quarter, and rival Nokia Siemens Networks (NSN) posted shocking earnings with actual net income.

The two companies compete against one another for operators’ gear business; both have struggled amid the global recession and intense challenge from cheaper companies in China.

Ericsson lost 26 percent in net profit as it sold fewer products and took restructuring charges.

“Operators in a number of developing markets were still cautious with their investments, which impacted Networks’ sales,” CEO Hans Vestberg said.

Income fell to 1.26 billion Swedish kronor, or $174.4 million, compared to 1.72 billion kronor a year earlier. Sales also dropped, from 49.57 billion kronor to 45.11 billion kronor, or 9 percent. Analysts had forecast net profit of 1.79 billion kronor on sales of 47.85 billion kronor, the Wall Street Journal reported.

Meanwhile, NSN seemed to improve its position somewhat. The joint venture between Nokia Corp. and Siemens has fought to hit the black since starting off in 2007, and the economy has been little help. But for the three months ended March 31, NSN pulled off a surprise: It made money. It showed an operating profit of 15 million euros, or $20.2 million, which compared to a loss of 122 million a year ago. Analysts had expected a loss of 62 million, according to Reuters.

Sales were down 9 percent, though, just like Ericsson’s, from 2.77 billion euros to 2.72 billion.

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