Component shortages leave Ericsson flat


Component shortages leave Ericsson flat

Alex Scroxton

Ericsson CEO Hans Vestberg has once again blamed a lacklustre quarter on continuing supply chain bottlenecks and shortages of critical components after the Swedish networking giant saw a slim 2% year-on-year rise in sales.

"A key priority has been to mitigate the effects of industry-wide component shortage and supply chain bottlenecks," he said.

"The situation has gradually improved during the quarter but it remains a challenge to fully
meet the demand for mobile broadband. While the supply chain bottlenecks have been resolved the industry-wide component shortage remains."

Altogether, Ericsson made sales SEK 47.5bn (£4.6bn) and net income of SEK 3.6bn, up from SEK 0.8bn this time last year.

The firm said that improvements in operational results and earnings at its mobility JV, Sony Ericsson, as well as reduced restructuring charges after the integration of various Nortel units were behind the surge in profits.

Broken out by division, Networks made sales of SEK 26.1bn, up 6% year-on-year, with the acquired Nortel units beginning to have a positive impact. Mobile broadband sales were up while voice remained sluggish, and LG-Ericsson suffered a particularly slow quarter as operators held off investment ahead of LTE.

Global Services were up 3% to SEK 19.1bn, with managed services particularly robust, while Multimedia fell 31% to SEK 2.3bn.

Sony Ericsson, which reports in euros, made sales of €1.6bn (£1.4bn), and clocked a 26% decline in unit shipments. However, increasing ASPs on mobility devices saw it reverse a loss of €164m this time last year, with net profit hitting €49m.

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