Ericsson Q2 profits fall 70%

Ericsson, one of the biggest telecoms companies in the world, has reported its second quarter results with profits down 70% on year.

Net income for the Sweden-based company - the biggest supplier of wireless networks in the world - fell to 1.9 billion crowns (£160 million) compared to 6.4 million crowns for the second quarter of 2007.

The news comes less than a week after the handset unit of the company, Sony Ericsson, reported second quarter pre-tax profits of just €8 million, compared to €327 million a year earlier.

Following the falling profits Sony Ericsson has announced plans to axe 2,000 jobs around the world in a bid to cut costs.

Dick Komiyama, president of Sony Ericsson, said his company must ’sharpen its portfolio’ if profits are to improve.

He also admitted that the company has too many similar devices in its current portfolio.

Analysts have pointed out that Sony Ericsson’s emphasis on high-end fully-featured handsets has forced down sales, whilst competitors have improved sales by focusing on low-cost handsets with basic features.