Ericsson Q1 profit surges on mobile broadband demand

Swedish network equipment maker Ericsson today reported a three-fold jump in net profit to 4.1 billion Swedish kronor ($672 million) for the quarter ending March 31, 2011 boosted by strong demand for mobile broadband.

In the year-ago period, the entity had a net profit of 1.3 billion kronor, Ericsson said in a statement.

The company attributed the robust earnings to rising demand for network infrastructure, such as radio base stations as well as increasing demand for mobile broadband devices.

Ericsson's sales in the first quarter rose to 53 billion kronor from 45.11 billion kronor in the year-ago period.

"Group sales in the quarter increased by 17% year-over-year driven by continued strong demand for mobile broadband and especially for the multi-standard radio base station," Ericsson President and CEO Hans Vestberg said in the statement.

Sales in the the company's network equipment business surged 35% year-on-year, buoyed by robust growth in mobile broadband devices in countries such as the US, India, Japan, South Korea and Russia.

However, the group warned that its supply chain could be affected due to problems related to the Japan earthquake.

"Our global supply chain of components is partly dependent on Japan and we estimate delays in delivery of certain products, Vestberg said, adding: "Our best estimate is that we will be able to deliver the majority of these volumes before the end of third quarter 2011".