Ericsson, the world’s biggest mobile telecoms equipment manufacturer, today announced first-quarter profits down 55 per cent to a five-year low as it joined its rivals in reporting falling demand for handsets.

The Swedish group reported that profits has fallen from 5.82 billion kronor (£490 million) to 2.65 billion kronor.

Ericsson’s stock has fallen more than 50 per cent since October after lowering its forecasts twice in the fourth quarter.

However, shares in the company today rose 21 per cent in early trading today after investors expressed relief the phone maker had not issued another profit warning.

Instead, Carl-Henric Svanberg, the chief executive of Ericsson, noted “flattish” demand this year.

The company has blamed slowing growth in Europe and North America for the fall.

On Wednesday, Sony Ericsson, the mobile phone manufacturer owned by Ericsson and Sony Corp, of Japan, said that its net income has tumbled €254 million (£199.5 million) to €133 million.

The handset figures reflected falling profits throughout the mobile phone sector after Nokia recently lowered forecasts and Motorola admitted yesterday that its handset sales have plummeted by 39 per cent in the first quarter of the year.

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