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Ericsson earnings fall sharply

Swedish wireless equipment maker Ericsson said its Q1 pre-tax earnings fell by as much as 46%, due mainly to rising operating expenses.

Pre-tax takings for the Q1 stood at 4.5 billion kronor ($756 million), down from 8.3 billion kronor ($1.38 billion) registered in the corresponding period of 2007, Ericsson said in its quarter report.

The result was however better than market expectations for a pre-tax profit of 3.7 billion kronor ($617 million), excluding restructuring profits, according to a survey by a market survey company.

The main reason for the drop in pre-tax income is that the operating expenses rose to 14.1 billion kronor ($235 million) from 11.8 billion kronor ($197 million) in the previous quarter as a result of the impact of the acquired companies, including amortization of intangibles, and increased R&D investments, the report said.

Q1 sales rose to 44.2 billion kronor ($737 million), up 5% from the same quarter of 2007.

Carl-Henric Svanberg, president and CEO of Ericsson, expressed satisfaction with the result.

“Our business developed well in the quarter, considering the present market environment and the declining US dollar,” he said in the report.

“We still find it prudent to plan for a flattish mobile infrastructure market in 2008. The ongoing cost reductions as we adjust to such a scenario are running according to plan,” he added. (Xinhua)