Ericsson Q2 Profit, Net Sales Drop

(RTTNews) - Swedish telecom major LM Ericsson (ERIC) reported Tuesday lower profit in its second quarter with weak net sales.

Looking ahead, the company said it enters the next phase from a position of strength.

The company expects some pressure on Networks adjusted gross margin in the third quarter due to higher volumes of network rollout projects.

In the second quarter, net income dropped 12 percent to 4.08 billion Swedish kronor from last year's 4.63 billion kronor. Earnings per share fell 11 percent to 1.22 kronor from 1.37 kronor a year ago.

Adjusted EBITA was 6.88 billion kronor, down 7 percent from the prior year. Adjusted EBITA margin declined to 13.1 percent from 13.2 percent last year.

Net sales sales were 52.69 billion kronor, 6 percent lower than 56.13 billion kronor a year ago. Organic sales decreased 1 percent year-over-year, primarily due to lower IPR licensing revenues, reflecting a non-recurring benefit from a partial settlement in the prior year period.

The company noted that organic sales grew in three out of four market areas.

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