Ericsson Turns To Profit In Q2, Despite Weak Sales; Says Increased Uncertainty Remains On Outlook

(RTTNews) - Swedish telecom major LM Ericsson (ERIC) reported Tuesday a profit in its second quarter, compared to prior year's hefty loss, with the absence of prior year's charge, despite weak sales.

In the quarter, net income was 4.6 billion Swedish kronor, compared to loss of 11.0 billion kronor a year ago. Earnings per share were 1.37 kronor, compared to loss of 3.34 kronor in the prior year.

The prior year's result was hit by 11.4 billion kronor impairment charge.

Adjusted EBITA was 7.4 billion kronor, significantly higher than last year's 4.1 billion kronor. Adjusted EBITA margin improved to 13.2 percent from 6.8 percent last year.

Sales for the quarter, meanwhile, dropped 6 percent to 56.1 billion kronor from 59.8 billion kronor a year ago. Organically, sales grew 2 percent.

Looking ahead, Ericsson noted that increased uncertainty remains on the outlook, both in terms of potential for further tariff changes as well as in the broader macroeconomic environment.

For the third quarter, Networks sales growth is expected to be below 3-year average seasonality, reflecting higher Q2 IPR revenue from previously unlicensed periods. Adjusted gross margin is expected to be in the range of 48 percent to 50 percent.

In Cloud Software and Services, sales growth in the quarter is expected to be broadly similar to 3-year average seasonality.

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