Ericsson AB, the world’s biggest maker of wireless networks, may report its sharpest profit drop in more than there years. Considering the costs it planned to cut 4,000 and lower the demand for phones at the handset companies with Sony Corp.

According to the median estimate of 15 analysts, its net income in the second quarter fell 56 percent to 2.82 billion kronor ($472 million).

Stockholm-based company reported its profit of 48.1 million, 1 percent up, which is the lowest in more than four years.

Chief Executive officer CharlHenric Svanberg, who has in the position of president over three consecutive years pf falling profit, lower revenue forecast twice last year due to a slump of demand in North America and Europe.

Sony Ericsson Mobile Communication Ltd, the handset venture with Sony, expressed on July 18 its little hope of net income in the second-quarter.

“The uncertainties continue to be regarding growth, competition in the industry, and pressure on profit margins,” said Jan Dworsky, an analyst at Handelsbanken Capital Markets in Stockholm.

“The global network market will be flat going forward, with limited growth next year, and competitive pressures will weigh on profit margins this year and next.”

The demand, estimated by Ericsson in February, for wireless and fixed-line telephone networks used by Telecom Italia SpA, Telefonica SA and other customers will be plain this year. The company also announced plans to cut 1,000 jobs in Sweden and probably three times more overseas.

WestLB analyst Thomas Langer in Dusseldorf, who lowered his evaluation of Ericssion from “buy” to “hold” on July 15, estimates the company reserved almost 800 million kronor in restructuring charges at its network unit.

Ericsson spokesman Fredrik Halstan turned down the request to comment on the coming earnings report.

Sony Ericsson announced its plan to cut annual cost by 300 million euros and its forecast of a challenging handset market this year. Net income fell to 6 million euros from 220 million euros one year ago and sales dropped 9.4 percent to 2.82 billion euros, the venture said.

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