Ericsson posts increased revenues

Ericsson today reported a 14% boost in revenue for the third quarter as strong sales of network equipment in North and South America balanced out flat growth in Europe.

Ericsson reported Q3 revenues of SEK 36.2 billion ($4.53 billion), up 14% from the same quarter a year earlier. Profits for the quarter came in at SEK 5.3 billion ($672 million), up from SEK 4.3 billion a year earlier.

Per usual, the majority of Ericsson’s revenues, SEK 26.8 billion, came from its networks division, which saw an overall 13% revenue improvement year-over-year. And within networks, sales were dominated by the Europe, Africa, and Middle East divisions, but revenues continued to flatten out in those regions as Ericsson and other vendors look to developing markets for new infrastructure builds.

Latin America, in particular, saw enormous growth for Ericsson. Year-over-year revenues jumped 40% to SEK 5.1 billion ($640 million), and Ericsson executives claimed that Latin America is clearly favoring GSM over CDMA, despite large carriers like Brazil’s Vivo adopting the competitive technology. Asia Pacific sales were up 20% year-over-year to SEK 7.9 billion ($991 million) due primarily to new contracts in the Pacific Rim and Southeast Asia. Ericsson, however, took a hit in revenues from China, where the carriers and the government are pursuing more infrastructure deals with national vendors--a problem affecting other western networks vendors like Nokia.

North America continued to be a highlight for Ericsson in light of its enormous contract with Cingular for GSM and UMTS networks, which Ericsson has credited in the past for the majority of its business in that region. Ericsson this week turned up its first commercial high-speed downlink packet access (HSDPA) network for Cingular http://telephonyonline.com/wireless/news/cingular_hsdpa_markets_101805/ . Ericsson saw a 35% gain in revenues to SEK 4.5 billion (U.S. $565 million) year-over-year in North America, but as Cingular’s UMTS networks are rolled out revenues are showing of petering: In the second quarter, Ericsson booked SEK 6.5 billion in North America.

Ericsson’s professional services business continued to grow also, show a 25% increase year-over-year in revenue to SEK 6.0 billion.

Ericsson’s handset venture with Sony, also continued to reclaim some of Ericsson’s old dominance in the cellphone market. Sony Ericsson shipped 13.8 million handsets in the third quarter, up 29% from the same period last year. The venture, focused on mid-tier to higher-end handsets, however, was still far behind the market leaders. Nokia shipped 66.6 million handsets in the quarter, followed by Motorola with 38.7 million units and Samsung with 26.8 million.