Ericsson’s revenues, profits up

Ericsson saw its revenues climb 12% in the third quarter as the vendor achieved gains in network equipment sales as well as a healthy cash infusion from its outperforming handset venture with Sony.

Its overall sales increased from 36.2 billion Swedish kroner to 40.8 billion SEK (U.S. $5.59 billion) year-over-year, coming from a 5% increase in mobile infrastructure sales to 28 billion SEK and a 2 billion SEK infusion from Sony Ericsson. Revenues from networks, however, were down 9% from the previous quarter. The handset venture is by far Ericsson’s highest growth business as it quickly reclaims the market share Ericsson lost when it canceled its mobile phone operations, the world’s second largest, and formed the joint venture with Sony.

Sony Ericsson shipped 19.8 million handsets in Q3, cementing its No. 4 sales status after passing LG Electronics last quarter. Sony Ericsson’s Q3 sales jumped 42% to 2.91 billion Euros ($3.67 billion) year over year and turned a profit of 298 million EUR, driven primarily by sales of its high-end Walkman line of music phones and Cybershot camera phones.

Ericsson said it expected only moderate growth in its core GSM/UMTS business for the remainder of 2006 and into 2007, but its professional services business continues to pick up some of networks’ slack. Revenues from its hosting, managed service, outsourcing and services group increased year over year 31% to 7.9 billion SEK in the 3^rd quarter. Combined, those divisions led to an overall increase in profit for Ericsson. It recorded a net income of 6.2 billion SEK ($849 million), up 17% form the 3^rd quarter of last year.