Ericsson, the world's biggest supplier of mobile telecommunication systems, has reported net profits of 4.6 billion kronor (€495m) in the first quarter of 2005, unchanged from the same time last year.
Sales increased to 39.2 billion kronor from 31.5 billion, thanks to growth in the group's services segment, which has been boosted by a need for operators to cut ownership costs, the company said.
Pre-tax profits, at 6.7 billion kronor, were well short of analysts' expectations of around 7.5 billion kronor however, and the operating margin, at 16.9%, was also below forecasts of 18.9%. Margins were hurt by the cost of integrating British company Marconi, which Ericsson acquired last year, analysts said.
Ericsson said it expected the global mobile network systems market to show 'moderate growth', which analysts said probably meant between 5-10%. Long-term industry growth remained solid, driven primarily by emerging markets, the company added.
Asia-Pacific sales grew by 44%, mostly owing to growth in Australia, India, Indonesia and Japan. China, meanwhile, was 'still in a waiting mode' ahead of a forthcoming decision on third-generation mobile technology, Ericsson said.
Sales were up by 13% in western Europe, by 21% in central and eastern Europe, the Middle East and Africa, and by 58% in North America. In Latin America sales growth was 3%.
Worldwide mobile phone subscriptions grew by 100 million in the first quarter, and Ericsson said it expected global subscriptions to pass the three billion mark sometime next year.
