Swedish telecom giant Ericsson, with CEO Carl-Henrik Svanberg, posted worse-than-expected net profit - and warns for bitter times.

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Ericsson, the world's leading mobile phone network provider, said that its second-quarter operating earnings rose 47 percent to 6.9 billion kronor (€629 million, $914 million), excluding its loss-making joint ventures Sony Ericsson and ST-Ericsson.

The profit beats analysts expectations. According to a poll by Reuters analysts had forecast an operating earnings of 6 billion kronor.

However, the company suffers from its bleeding joint ventures. Net profit, including restructuring charges and losses from Sony Ericsson and ST-Ericsson, dived from 2 billion kronor till 800 million kronor. Net profit was nearly twice as bad as the average predictions of analysts who had been looking at profits of 1.6 billion kronor.

Ericsson's stock share dived almost 8 percent at the Stockholm stock exchange.

Up till now Ericsson has been unharmed by the global economic downturn, partly because of strong sale in China and robust services business, but said in the statement that the impact of the economic climate on the mobile networks market had become more severe.

"The effects of the global economic climate on the mobile infrastructure market are now more notable, especially in markets with currencies under pressure and tougher credit environment", Carl-Henric Svanberg, President and CEO of Ericsson said.

"At the same time the consumer demand for new services and broadband capabilities are quickly accelerating," he added.

The company’s sales rose to 52.1 billion kronor from 48.5 billion a year ago, slightly lower than seen by analysts.

Gross margin, an significant measuring rod for stock market players, was in line with first quarter at 36.3 percent, down from 37 percent last year.

ST-Ericsson, the wireless technology company created in February by French-Italian group STMicroelectronics and Sweden's Ericsson, said on Thursday that second-quarter net loss widened to $165 million from $69 million a year ago while sales dives 31 percent to $666 million.

Sony Ericsson Mobile Communications, the handset making joint venture between Japan’s Sony and Sweden’s Ericsson, made a second-quarter loss of 213 million euros ($301 million), compared to a profit of 6 million euro the year earlier, as sales fell 40 percent to 1.68 billion euros.

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