Ericsson results disappoint

Ericsson results disappoint
Swedish telecommunication equipment maker Ericsson on Friday reported a gain in second quarter net earnings but its sales performance fell short of market expectations.

Ericsson said its net profit in the April-June period rose 12.3 percent to

6.4 billion kronor (698 million euros, 962 million dollars) compared with the same quarter last year.

Sales gained 8.2 percent to 47.6 billion kronor. Analysts surveyed by SME-Direkt had foreseen a sales total of 48 billion kronor.

Ericsson shares fell 1.94 percent in early trading on the Stockholm exchange, which was down 0.17 percent.

The group said its operating margin rose one point in annual terms to 19.4 percent, just shy of expectations by analysts for a margin of 20.2 percent.

Operating earnings surged 12 percent to reach 9.3 billion kronor, again short of the 9.8 billion expected by analysts.

Nonetheless, Ericsson chief executive Carl-Henric Svanvberg described the quarter as “encouraging.”

“We continue to outpace the market,” he said in a statement.

“Sales showed an encouraging year-over-year increase this quarter, primarily driven by Asia Pacific. Europe, Middle East and Africa were softer while we see improving trends in the Americas. Margins were stable with improved cash generation.”