We get Daniel and Henrik Sedin, they get Nortel profits. Shares of Ericsson were up sharply on Friday after the Swedish telecom equipment maker reported a more than four-fold jump in net income to (US) $538 million.
Ericsson has bought a whole host of Nortel assets of late, including the former Ottawa giant’s North American GSM Business and, more recently, its Multi-Service Switch business. The former was a key factor to Ericsson’s improvement.
As Bert Hill reported in The Ottawa Citizen, Nortel pretty much saved the quarter for Ericsson:
Otherwise, Ericsson had another weak quarter, with overall revenues up just two per cent to $7.2 billion and missing analyst expectations by a small margin.
Without the Nortel products, Ericsson said sales would have declined five per cent. Nokia Siemens Networks, a much weaker rival, just reported a seven-per-cent increase in sales in the same quarter.
These numbers will breathe a bit of life into Ericsson, whose stock has not recovered from a late 2008 battering. But critics here at home, such as David Olive of The Toronto Star, will no doubt view this as evidence that the sale of Nortel assets was conducted too hastily and perhaps the company should have been bailed out by the Feds, as GM and Chrysler were.