Ericsson surprised the market with a poor fourth quarter showing, pulled down by losses in its joint venture projects.
The Stockholm-based company announced profits had fallen by over two-thirds compared to the fourth quarter as operators reigned back their spending. Sales rose by just 1% to SEK63.67 billion (€7.24 billion).
The full year figures were more encouraging as a 12% increase in sales delivered a net profit of SEK12.19 billion.
“We believe that the industry fundamentals for longer-term positive development remain solid. Short-term, we expect operators to continue to be cautious with spending, reflecting factors such as macro economic and political uncertainty,” said Hans Vestberg, president and CEO of Ericsson, adding that the company would continue to concentrate on coverage and network modernization, rather than capacity projects.
Multimedia sales in the quarter decreased -2% year-over-year and increased 33% sequentially. Both multimedia brokering and TV showed good development. For the full year, sales were flattish, negatively impacted by political unrest in the Middle East and weak development in India.
