Swedish wireless equipment maker Ericsson said on Friday that its first-quarter pre-tax income fell by as much as 46 percent, due mainly to rising operating expenses.
Pre-tax income for the first quarter stood at 4.5 billion kronor (756 million U.S. dollars), down from 8.3 billion kronor (1.38 billion dollars) 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 dollars), 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 dollars) from 11.8 billion kronor (197 million dollars) 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.
First-quarter sales rose to 44.2 billion kronor (737 million dollars), up five percent 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 U.S. 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.
Source:Xinhua
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