Swedish telecommunications equipment giant Ericsson (ERIC.US) announced a second-quarter adjusted profit exceeding forecasts, driven by robust sales growth in North America and aggressive cost reduction measures. The company reported an operating profit of 70 billion Swedish kronor (approximately $728.5 million) after restructuring charges, a significant turnaround from the prior year's loss of 11.9 billion kronor. Analysts had anticipated a profit of just 6.1 billion kronor.
Chief Executive Officer Borje Ekholm emphasized the company's progress in a statement, declaring, "We have structurally reduced our cost base and remain committed to enhancing efficiency further." Sales in the Americas business unit surged 10%, fueled by strong performance in its largest market, North America. Ericsson attributed this growth to previously secured contracts boosting network, cloud software, and service revenues.
However, group sales declined 6% to 56.1 billion kronor, missing analyst expectations of 59.3 billion kronor. Organic sales showed resilience, climbing 2%. Tariffs continued to weigh on margin expansion within the networks division. Looking ahead, Ericsson cautioned that tariff shifts and broader macroeconomic uncertainties cloud its future outlook, highlighting ongoing challenges.
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