Ericsson Q2 Reports 11% Revenue Growth

Ericsson-Q2-Reports-11%-Revenue-GrowthEricsson’s second quarter Revenue increased by 11 percent YoY whereas sales, adjusted for comparable units and currency, decreased by -6 percent YoY.

The mobile broadband business in North America stabilized in the quarter, but remained at a lower level than a year ago. Professional Services continued to deliver strong sales growth YoY. Sales in segment Networks recovered and showed a growth QoQ of 18 percent.

The global cost and efficiency program is progressing according to plan and restructuring charges in the quarter were SEK 2.7 (0.2) billion, mainly related to the reductions in Sweden.

Hans Vestberg, president and CEO, Ericsson said, “Reported sales increased by 11 percent. Sales, adjusted for comparable units and currency, decreased by -6 percent YoY, mainly impacted by less capacity business in North America. Profitability improved sequentially, driven by a strong development in segment Networks.”

The mobile broadband business in North America stabilized in the quarter, but remained at a lower level than a year ago. The YoY decline in North America was partly offset by an increased pace of 4G deployments in Mainland China. Sales growth was strong in the Middle East, India and South East Asia, while it continued to be weak in Japan. Professional Services sales increased YoY with continued strong global demand and growth in all ten regions.

The OSS & BSS business had a favorable development YoY, contributing to sales both in Professional Services and segment Support Solutions. Networks sales increased by 18 percent sequentially, supported by the stabilized mobile broadband sales in North America.

Operating income, excluding restructuring charges, increased YoY by almost 50 percent, with improvements in all segments. After a weak first quarter, segment Networks profitability recovered, driven by increased sales and a positive currency hedge effect.

The global cost and efficiency program is progressing according to plan. The target, to achieve savings of approximately SEK 9 billion during 2017 relative to 2014, remains. During the quarter, numerous activities were implemented globally including a reduction of 2,100 positions in Sweden, resulting in higher than normal restructuring charges. Savings related to the activities will start to impact results towards the end of this year.

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