By Dominic Chopping
STOCKHOLM–Ericsson AB on Friday posted a smaller-than-expected second-quarter net loss and said trends and market mix will likely be similar in the third quarter.
The Swedish telecommunications-equipment company said sales in its key networks unit fell 8% on the year, with strong sales mainly in India helping to partially offset a 50% sales drop in North America, where customers have cut spending and reduced inventory after high investment levels in 2021 and 2022.
Ericsson reported a net loss attributable to shareholders of 686 million Swedish kronor ($67.2 million) compared with a profit of SEK4.5 billion a year earlier, as sales rose 3% to SEK64.44 billion.
Analysts polled by FactSet had expected a net loss of SEK1.27 billion on sales of SEK63.94 billion.
Earnings were weighed by restructuring charges of SEK3.1 billion in the quarter, mainly from redundancy expenses that are part of its continuing cost cutting.
The earnings before interest, tax and amortisation margin excluding restructuring fell to 5.7% from 12.0%, in line with the mid-single-digit level guided by Ericsson.
“Overall, we thus expect 3Q Ebita margin excluding restructuring charges to be in line with or slightly higher than 2Q, followed by a seasonally stronger 4Q,” it said.
Write to Dominic Chopping at [email protected]
Read the full article here
