Ericsson reported first-quarter sales up 17 percent year-over-year to SEK 53.0 billion, driven by continued strong demand for mobile broadband and especially its multi-standard radio base station RBS 6000. Net profit improved to SEK 4.1 billion from SEK 1.3 billion a year earlier thanks to the increased profitability at its Networks business. The contribution from stakes in ST-Ericsson and Sony Ericsson was a loss of SEK 0.5 billion. Networks posted an EBITA margin of 20 percent on revenues up 35 percent to SEK 33.2 billion. Global Services saw sales drop 4 percent to SEK 17.4 billion, mainly due to currency effects, and Multimedia sales were little changed at SEK 2.3 billion. Ericsson's cash flow from operations was a negative SEK 2.9 billion versus SEK 2.3 billion a year earlier, hurt by a higher level of work in progress and continued ramp up of production. The company said Q1 results were not impacted by the earthquake in Japan, but its supply chain is partly dependent on components from there and some product delays are expected. Ericsson said it's working to find and integrate alternative components and increase volumes with second source suppliers. While it depends on Japan's overall recovery, the company expects to deliver the majority of volumes due before the end of the third quarter. Ericsson said it sees the market increasingly shifting from GSM to 3G and LTE. The strong demand for mobile broadband resulted in five out of its ten regions showing growth year-over-year in Q1. Countries with especially strong growth were the US, India, Japan, Korea and Russia, while China continued to grow in 2G.
