Telecom equipment maker Ericsson today reported a 59 per cent growth in net income

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to 3.2 billion Swedish kronor (USD 496 million) in the April-June quarter of 2011 driven by higher sales of network equipments.

The company's net income grew to 3.12 billion Swedish kronor for the second quarter ended June 30, 2011 from 2 billion Swedish Kronor an year ago. Although, market analysts were expecting a net income of over 4 billion Swedish Kronor, Stockholm-based firm said in a statement.

Ericsson's profit was hit by contracts in Europe and India.

Besides, the company's profitability was also dragged by a restructuring charge of 1.3 billion Swedish kronor as the company reduced staff in Sweden as well as higher than expected charge for voluntary redundancies and early retirements.

The company's net sales climbed 14 per cent 54.8 billion Swedish kronor, narrowly missing forecast, in the second quarter from 48 billion Swedish kronor in the year-ago period.

"Group sales in the quarter increased by 14 per cent year-over-year driven by a continued strong demand for mobile broadband. Sales were negatively impacted by the strong Swedish kronor, and sales for comparable units, adjusted for currency and hedging, increased 27 per cent year over year," Ericsson CEO and President Hans Vestberg said.

Gross profit margin was 37.8 per cent in the second quarter, down from 39 per cent one year ago.

"Margins were negatively impacted by 3G rollouts in India as well as network modernization projects in Europe," the company said.

During the quarter, the company has added 6,383 new personnel to a total of 97,929 employees.

In the quarter, some 1,000 individuals joined Ericsson through acquisitions and about 4,500 related to its services business, mainly in Brazil, China, India and the US.

Ericsson said it saw strong growth in Brazil, China, Germany, Korea, and Russia, while the US "maintained its high business activity although sequentially the networks business was somewhat slower while services continued to show good development".

The company said second quarter was tough for Sony Ericsson, a mobile phone joint venture between Ericsson and Japan's Sony as it posted a net loss of 50 million euros.

The loss was blamed on component shortages resulting from the Japanese earthquake in March, coupled with falling demand for its traditional mobiles.