Ericsson Q1 core profit weak

STOCKHOLM (Reuters) - Swedish telecom gear maker Ericsson posted weaker-than-expected underlying earnings, hit by a slumping global mobile phone market and cutbacks in investments by operators.

The world's top mobile equipment maker, however, took a more optimistic view than rivals of a market threatened by global recession.

Ericsson said the global downturn had not hit the mobile network market that much yet, though it was hard to predict how operators would react to the worst recession in decades.

"So far the effects are limited, but we see some," chief executive Carl-Henric Svanberg told reporters on Thursday.

"We see some operators are delaying longer-term investment in fixed, and the fixed operators are affected on revenues."

Ericsson reported weaker-than-expected sales for the quarter and handset maker joint-venture Sony Ericsson -- hit by a slumping global mobile phone market -- also weighed heavily on the results.

Its shares, among the top blue-chip performers in Europe since autumn last year, were down 7.6 percent at 1038 GMT.

But Svanberg was more upbeat than many in the industry.

Number two mobile network firm Nokia Siemens Networks fell to its first ever quarterly loss in the January-March period and warned the market would shrink 10 percent this year in euro terms.