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Stockholm (AFP) April 27, 2011 Sweden's Ericsson, the world's biggest mobile network equipment maker, on Wednesday posted a first-quarter net profit up more than threefold, beating expectations and sending its stock price soaring nearly 10 percent. From January to March, the company recorded group net profits of 4.1 billion kronor (460 million euros, 675 million dollars), a 224-percent rise from the 1.26 billion kronor it posted for the same period in 2010. The figure was far higher than the three billion kronor which analysts consulted by Dow Jones Newswires had expected, and by early afternoon, Ericsson's shares were trading up 9.32 percent at 87.95 kronor a pop on a Stockholm stock exchange up just 0.19 percent. The company also posted a 17-percent increase in sales, or 25-percent not counting the exchange rate effects, largely "driven by continued strong demand for mobile broadband," Hans Vestberg, president and chief executive officer of Ericsson, said in the earnings statement. Turnover was helped by a 39-percent increase in sales in North America; a 46-percent rise in Central Asia and northern Europe, and a 74-percent rise in China and North East Asia. "Sales in the first quarter were not impacted by the devastating earthquake and tsunami in Japan," Vestberg said. However, the company's supply chain of components had been partly dependent on Japan, which had caused some delays, he said. "We have taken a number of actions to mitigate the effects to secure that we limit the impact on our customers," he added. Ericsson's mobile phone joint venture with Japan's Sony meanwhile saw its first-quarter sales, reported earlier this month, fall 19 percent to 1.1 billion kronor and was "experiencing some disruptions in its supply chain from the earthquake in Japan." And its other joint venture, wireless technology company ST-Ericsson, saw its sales plunge 27 percent during the quarter to 444 million kronor, which was a steeper drop than expected. The decline was expected to continue in the second quarter, "due to the ongoing decline in legacy products," as ST-Ericsson continues its shift to new products, Ericsson said, adding it was "committed to financially support ST-Ericsson's execution of their new portfolio." At the end of March, Ericsson counted 91,546 employees and remained the market leader in mobile network equipment ahead of Finnish-German giant Nokia Siemens, French-based telecom equipment maker Alcatel-Lucent and China's Huawei.
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