Updated from 2:29 a.m. EDT

Telecommunications equipment maker Ericsson ( ERIC) said first-quarter profit fell 35% to 1.72 billion kronor ($216 million) from 2.64 billion kronor a year earlier as demand for handsets from joint ventures Sony Ericsson and ST-Ericsson declined.

Sales in the quarter rose 12% to 49.6 billion kronor.

In a statement Thursday, Ericsson said the effects of the global economic recession on the mobile network market are so far limited.

"We have seen operators, in a few markets where local currencies have depreciated dramatically, postpone investments," Ericsson said. "Some operators are also more cautious with longer-term investments in fixed networks, such as rollout of fiber networks. Most operators, however, have healthy financial positions, there is a strong traffic growth and the networks are fairly loaded."

The company said it remains "difficult to more precisely predict how operators will act in the current environment."

Sony Ericsson, a joint venture of Ericsson and Japan's Sony ( SNE), earlier this month reported a loss of 293 million euros for the first quarter as sales fell.
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