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Ericsson shares spike after profit leap

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Ericsson CEO Hans Vestberg. Photo: TT
15:17 CEST+02:00
Swedish telecom equipment maker Ericsson reported a leap in net profits for the second quarter 2014 on Friday, beating analyst expectations.

Net profit between April and June rose to 2.579 billion kronor ($378 million), almost doubling the 1.469 billion kronor the group reported a year ago.

Analysts polled by Dow Jones Newswires had predicted a 2.23-billion-kronor profit.

Revenue remained almost stable at 54.849 billion kronor, also beating the analysts' expectations of 52.06 billion kronor.

Sales were much stronger than a year ago in India, where they grew 29 percent and the Middle East, up 13 percent, but fell by 29 percent in Sub-Saharan Africa and were down by 11 percent in the Mediterranean area.

Compared to last quarter, sales were up in all regions except India.

"Sales in the quarter year-over-year were driven by growth in the Middle East, China and India, as well as continued capacity business in North America," chief executive hans Vestberg said in a statement.

"Political unrest prevails in parts of the Middle East and Africa and is still impacting sales."

The conflict in Ukraine, however, did not have a negative impact on sales in the region, the group said.

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In May, Ericsson announced it had finalised the acquisition of British media services company Red Bee Media, which "has strengthened Ericsson's position in the transforming television and media industry".

Ericsson shares were up by 7.86 percent in mid-afternoon trading on the Stockholm bourse, where the main index was 0.44 percent higher.

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