A 63 percent year-on-year fall in Q2 profits, to €141 million, led to a four percent drop in the Ericsson share price on Wednesday.

However, a strong profit return in Q1 meant net income for the first six months of the year was above the same period last year.

“In 2010 we made a conscious decision to gain market share and increase technology and services leadership, well aware of the short-term profitability pressure,” said president and CEO Hans Vestberg.

“Our focus is now on translating these gains into sustainable profitable growth."

Q2 revenues increased one percent to €6.5 billion, driven by growth in the company’s global services and support solutions divisions.

Revenues from global services were up 26 percent y-o-y and 17 percent on Q1 to €2.8 billion.

"In Global Services all areas showed good growth in the quarter due to operators' focus on operational efficiency and high project activities,” said Vestberg.

Support services were up 47 percent y-o-y and 15 percent quarter-on-quarter to €413 million, driven by billing systems and TV solutions.

However, the Sweden-based vendor’s principal networks business unit fell 17 percent y-o-y and two percent q-o-q to €3.3 billion.

“Networks sales decreased mainly due to the expected decline in CDMA equipment sales as well as lower business activity in China, including weaker sales of GSM and lower 3G sales in Russia," said Vestberg.

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