Ericsson 1Q06 results

Ericsson reports solid performance. 1Q06 sales reached €4.2bn, up 24%; the operating income was €755m and the net income was €496m (flat). Gross margin however decreased 5 points to 43%, as well as operating margin to 17%. Margins were hit by Marconi operations incorporation. Mobile networks unit reported a 14% growth to €2.9bn and the fixed unit posted €312m revenues, up 174%, due to the added Marconi sales, with an operating loss of $79m. Professional services amounted to €776m, up 60%. With mobile broadband accelerating, Ericsson is very well placed with a clear lead in HSDPA deployments, and a larger proportion of initial network build outs. Ericsson believes that the global mobile systems market, will show moderate growth compared to 2005, and that the addressable market for professional services will continue to show good growth in 2006.