Business

Ericsson quarterly profits jump on cost cuts

Ericsson headquarters
Image caption Ericsson is hoping new faster networks will boost business

Ericsson, the world's biggest maker of mobile phone equipment, has reported a sharp rise in profits.

The company made 1.5bn swedish krona ($230m, £150m) in the second quarter up 26% on the same period in 2012, helped by cost cuts and higher profit margins.

But sales were flat at 55.3bn swedish krona, which disappointed analysts who watch the company.

Ericsson has struggled in recent years as customers have held back on investing in mobile phone networks.

The company is hoping new faster networks, particularly a technology know as 4G LTE, will persuade customers to start spending again.

It is estimated that 4G will allow download speeds up to 10 times faster than current 3G networks.

In a statement with the second quarter results, Ericsson's chief executive, Hans Vestberg said: "We continue to strengthen our leading position in 4G LTE. The vendor selection processes for 4G LTE in Russia and China continue and to date we have been awarded contracts by two large operators in Russia."

Ericsson shares were down almost 5% in early trading in Stockholm.

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