Swedish telecom equipment maker Ericsson today reported a 6% jump in third quarter net profit to 3.8 billion kronor (€416m) in line with analyst expectations.
Sales in the third quarter jumped 17% to 55.5 billion kronor, beating expectations of analysts who had expected a figure of 52.7 billion kronor.
Sales soared by 24% when currency effects were excluded, with strong showings in Latin America, Northern Europe and Central Asia, said Ericsson, the world leader in mobile phone network equipment.
The strong figures were driven by "continued strong demand for mobile broadband and well as increased services revenues," Ericsson's chief executive Hans Vestberg said. He noted that the remaining effects of the March earthquake and tsunami in Japan on Ericsson's supply chain had been eliminated.
While the quarterly figures were strong, Ericsson remained cautious in its outlook in light of the global financial and economic crises. "With economic uncertainties in parts of the world, we cannot exclude somewhat more cautious short-term operator spending," the company said.
However, Vestberg said he had seen no effects of the euro zone crisis in his meetings with customers.
"I have met with clients who account for 70-75% of our income in the past 45 days. The crisis isn't the first subject that has come up," he said, adding that "the main issue with our clients hasn't been financing." "But we can't exclude that our clients' investments will be affected if the world experiences great uncertainty," he added.
The Ericsson CEO said operators were holding off on investments following a wave of consolidations, and many were now switching from 3G to 4G technology.
The decline contributed to a drop in the company's gross margin, falling from 37.8% in the second quarter to 35%. Analysts had forecast the figure would come in around 37%.
The drop is attributed to the fact that Ericsson is selling fewer of its more lucrative products in the US, and replacing aging networks in Europe amid fierce price pressure.
Vestberg refused to comment on media reports last week that Japan's Sony was looking to buy out Ericsson for full control of their mobile phone joint venture Sony Ericsson.
