Results Beat Expectations At Ericsson And Nokia
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Nokia and Ericsson reported better-than-expected financial results on Thursday, lifted by strong demand for cellphones and network gear in Asia, India and other emerging markets.
Shares of Nokia rose more than 10 percent in Helsinki after the company reported a 68 million euros, or $93.6 million, loss in the third quarter, less than many analysts had expected. The result was helped by an 8 percent increase in global shipments of basic cellphones.
Ericsson, the market leader in phone network equipment, rose more than 5 percent after the company said sales rose 17 percent in the quarter to 55.5 billion Swedish kronor, or $8.4 billion, from 47.5 billion kronor a year earlier. Adjusted for currency fluctuations, sales rose 24 percent. Net profit rose 6 percent, to 3.8 billion kronor.
Hans Vestberg, the chief executive of Ericsson, said in an interview that the results indicated that the transition to mobile Internet and smartphones was bucking the general economic downturn.
"Increased global smart phone penetration, new devices and the introduction of tiered pricing is driving continued mobile data traffic growth," Mr. Vestberg said. The number of users of mobile Internet services, which deliver speeds comparable to fixed-line networks over wireless grids, rose to 900 million this month from 500 million in January, he said.
Ericsson predicts that the number of mobile broadband subscribers will rise to five billion by 2016. Ericsson's quarterly gains were powered by developing markets, led by Latin America, China and northeast Asia, the Middle East and sub-Saharan Africa. Sales in Scandinavia and central Asia rose 49 percent.
Nokia, the cellphone maker based in Espoo, Finland, disclosed gains in its core basic phones business, which accounts for the bulk of its revenue, after it introduced handsets in India and Asia that operated with two SIM cards, a preference in developing markets. Nokia said shipments of basic handsets rose to 89.8 million units in the quarter from 83.3 million m's a year earlier.
First Published October 21, 2011 12:01 am
