Ericsson on Thursday blamed slower mobile broadband activity in North America for a 6% decline in net sales in the first quarter of this year.
The Swedish equipment maker posted net sales of 53.5 billion kronor (€5.7 billion) for the three months to the end of March, up 13% on the reported figure for the year-ago quarter, but dow n 6% when adjusted for comparable units and local currencies.
Net profit fell by 14% to SEK1.5 billion.
On the networks side, "mobile broadband business in North America continued to be slow in the quarter as operators remained focused on cash flow optimisation in order to finance major acquisitions and spectrum auctions," said Ericsson CEO Hans Vestberg, in a statement.
Vestberg added that the decline in North America was in part offset by the fast pace of 4G rollout in China.
North America is Ericsson’s biggest geographic segment, accounting for 23% of sales in Q1 across its three divisions: networks, global services and solutions. Sales were flat, year-on-year, with a 21% decline in networks in the region being offset by growth in the other two businesses.
Ericsson’s North East Asia unit, which includes China, contributed 11% of sales revenue and reported 23% growth versus Q1 2014.
China is Ericsson’s second largest country market by sales, accounting for 8% of sales revenue, behind the U.S. For the year-ago quarter their contributions were 26% and 5% respectively.
"Consumer demand and mobile data traffic growth continued to be strong in North America, creating further need for quality and capacity investments," Vestberg said.
"However, with current visibility, we anticipate the fast pace of 4G deployments in mainland China to continue and the North American mobile broadband business to remain slow in the short term," he added.
