Ericsson and Nokia profits hit

Handset manufacturers struggle with decline in sales.

Two major mobile phone handset manufacturers have both reported lacklustre quarterly results.

Ericsson reported a $1.3bn loss for its second quarter compared with a $953m profit the previous year, mainly because of the decline in its handset business.

"Weak market conditions persist. Customers are delaying spending on network expansion and are postponing contracted deliveries," said Kurt Hellstrom, president and chief executive at Ericsson. "We cannot predict how long this will go on, as we have yet to see signs of improvement."

Hellstrom added that increased spending by telcos on third-generation services and further cost-cutting will lift company revenues by the end of the financial year.

Nokia reported a 16 per cent slide in its second quarter profit to Eu1.17bn. Sales of Nokia handsets have risen 10 per cent, although this was offset by discounting and a fall in infrastructure sales. It also lowered its financial predictions in a trading statement issued in June.