Swedish telecommunication giant Ericsson on Wednesday said its income for the year 2011 had shrank by 21 percent from the previous year, due to drastic income drops in the fourth quarter of 2011.
According to an annual report issued by Ericsson, the company posted strong sales growth of 12 percent last year, compared to 2010, reaching 226.9 billion Swedish kronor (about 33.3 billion U.S. dollars), thanks to the large demand for mobile broadband and network rollout services.
Total operating expenses of the company in 2011 amounted to 59.3 billion Swedish kronor, with research and development expenses amounting to 32.6 billion Swedish kronor, increasing 9 percent year on year.
In the fourth quarter last year, the income of Ericsson before taxes was only 1.8 billion Swedish kronor, plummeting from 7.8 billion during same period in 2010. Sales in the last three months of 2011 amounted to 63.7 billion Swedish kronor, achieving a slight increase by 1 percent year on year.
"We also see increasing cautiousness inside the operators under the fourth quarter, based on the uncertainty of both economic development and political disturbance in some areas," President and CEO of Ericsson Hans Vestberg said in the report.
"We expect operators to continue to be cautious with spending, reflecting factors such as macroeconomic and political uncertainty," Vestberg said, adding that Ericsson still remains positive for the long-term development of industry fundamentals.