26th April - Swedish vendor Ericsson delivered yet more bad news for the industry as a whole on Friday, announcing a 55 per cent drop in net profit for the first quarter. Yet amazingly, the kit maker reaped the benefits of investor joy for still managing to beat forecasts.

Income came in at SEK2.6bn, while sales grew 5 per cent per cent year on year to reach SEK44.2bn.

Ericsson president and CEO, Carl-Henric Svanberg, said that sales in the Networks division grew by 2 per cent year on year despite a negative impact from the decline of the dollar. The company witnessed increased sales of GSM in high growth markets, especially China and India. The company also benefited from ongoing 3G rollouts, including major rollouts in Russia and Latin America.

Ericsson will be cashing in on several major operators' plans to upgrade their networks to 14.4Mbps and the company will introduce 21Mbps during the second half of the year.

"Our business developed well in the quarter, considering the present market environment and the declining USD," said Svanberg. "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."

Managed services continued to do well, with revenues increasing 20 per cent year on year, while sales in Professional Services grew by 8 per cent.

Earlier this month, handset joint venture Sony Ericsson took a knock that sent its net income down to Eur133m, from Eur254m in the same period last year. Sales fell 8 per cent from Eur2.92bn down to Eur2.7bn for the same period.