Ericsson Sees 2Q Earnings Jump Despite Flat Sales
STOCKHOLM (AP) — Wireless equipment maker Ericsson AB's second-quarter earnings grew 26 percent compared to a year ago thanks to higher gross margins and lower operating costs, while sales were flat for the period due to currency fluctuations, the company said Thursday.
Earnings over the three-month period reached 1.5 billion kronor ($227 million), compared with 1.2 billion kronor in the second quarter last year, partly due to the effects of a string of recent decisions to exit loss-making businesses.
Sales, however, were flat at 55.3 billion kronor ($8.4 billion) due to currency fluctuations, CEO Hans Vestberg said in a statement, though unit sales were up 7 percent year-on-year, pointing to a slight recovery.
The Stockholm-based manufacturer of telecommunications infrastructure, the world's largest, is struggling in an increasingly competitive environment and has cuts thousands of jobs in Sweden over the past year to slash costs.
Globally, Ericsson's second quarter sales in North America were up 18 percent year-on-year, accounting for nearly 28 percent of all company sales, while sales in northeast Asia, which includes China and South Korea, slumped 21 percent.
The company said it strengthened exposure to television and media markets over the quarter as use of video — the largest component of traffic in mobile networks — is expected to grow 60 percent annually until 2018.