Updated from 7:33 a.m. EDT

One of the industry's biggest success stories of 2004 joined the weeklong wireless hit parade Friday, though its shares didn't come along for the ride.

Ericsson ( ERICY) posted solid first-quarter numbers. In doing so, the Swedish infrastructure company joined peers ranging from Motorola ( MOT) to Qualcomm ( QCOM) in broadcasting the group's robust health.

For its first quarter ended last month, Ericsson posted a first-quarter profit of 3 billion Swedish kronor ($390 million), or 19 kronor a share. That reversed the year-ago loss of 4.3 billion kronor, or 27 kronor a share. Sales rose 8.5% to 28.1 billion kronor.

"We have clearly strengthened our market position since last summer," said CEO Carl-Henric Svanberg. "Our year has started well with a number of contracts in key growth areas. A stronger customer focus, including our commitment to operational excellence, is clearly contributing to this achievement.

"We also continued to improve operating results. Gross margin development exceeded our earlier expectations," he added. "We are benefiting from our restructuring efforts, and going forward we will continue to strive for best-in-class cost efficiency. Our financial position is now one of the industry's strongest."

The news comes as Ericsson continues to benefit from a wide-ranging restructuring it undertook last year. The company slashed thousands of jobs in narrowing its focus on products that customers are actually demanding. But despite Friday's solid results, Ericsson shares slipped 7% in morning trading.

Indeed, Ericsson's situation is similar to that of big North American gear companies like Lucent ( LU) and Nortel ( NT). Like those companies, Ericsson is starting to benefit from an apparent rise in demand for the equipment it makes. Also, like those companies, Ericsson has seen a sharp appreciation in its shares, which in October 2002 were consolidated in an embarrassing reverse stock split. But for 2004, the stock is up 82%.

Last quarter, the company indicated that it believed the global wireless market had stabilized. "We expect sales for the first quarter to show a sequential decrease due to seasonality, but to show moderate growth year over year," the company said. "However, we are monitoring the sustainability of this growth trend as some part could be operators catching up on last year's limited investments."

Friday, Ericsson dropped $2.25 to $30.