Ericsson's net profit contracted by 42 percent in the third quarter of the year, as lower profitability within its networks sector negatively impacted on its overall performance.

The Sweden-based vendor reported that its net income reached the equivalent of €253 million, down from €437 million in 2011.

Net sales also dwindled, down two percent year-on-year to €6.3 billion.

"Demand for global services and support solutions continued to be good, while networks showed a decline in sales year-on-year," Hans Vestberg, president and CEO of the firm, remarked.

"In North America, networks sales developed favourably, despite the expected decline in CDMA sales, while parts of Europe, China, Korea and Russia continued to be slow," he added.

Ericsson's operating margin fell from 11.3 percent in Q3 last year to 6.7 percent in the same period of this year, due to a higher share of coverage projects and modernisation projects in Europe, although cash flow from its operations hit €804 million.

Ericsson's networks performance was strong in North America, but decreased overall due to weaker sales in parts of Europe, China, Korea and Russia.

A continued decline in CDMA equipment sales also contributed to this.

However, the company's global services sector increased its sales by 19 percent.

Earlier this week, ST-Ericsson, a joint venture between STMicroelectronics and Ericsson, also announced its own results for the third quarter of the year.

It revealed a four percent increase in sales compared to the previous quarter.

The body said this reflected the continued success of NovaThor platform shipments, as well as €27 million in revenues from IP licensing.

Overall, ST-Ericsson's adjusted operating loss contracted by €67 million to €114 million during the quarter, thanks largely to volume and margin improvements and key actions to reduce operating expenses.