SHARE
COPY LINK

ERICSSON

Ericsson shares spike after profit leap

Swedish telecom equipment maker Ericsson reported a leap in net profits for the second quarter 2014 on Friday, beating analyst expectations.

Ericsson shares spike after profit leap
Ericsson CEO Hans Vestberg. Photo: TT

Net profit between April and June rose to 2.579 billion kronor ($378 million), almost doubling the 1.469 billion kronor the group reported a year ago.

Analysts polled by Dow Jones Newswires had predicted a 2.23-billion-kronor profit.

Revenue remained almost stable at 54.849 billion kronor, also beating the analysts' expectations of 52.06 billion kronor.

Sales were much stronger than a year ago in India, where they grew 29 percent and the Middle East, up 13 percent, but fell by 29 percent in Sub-Saharan Africa and were down by 11 percent in the Mediterranean area.

Compared to last quarter, sales were up in all regions except India.

"Sales in the quarter year-over-year were driven by growth in the Middle East, China and India, as well as continued capacity business in North America," chief executive hans Vestberg said in a statement.

"Political unrest prevails in parts of the Middle East and Africa and is still impacting sales."

The conflict in Ukraine, however, did not have a negative impact on sales in the region, the group said.

In May, Ericsson announced it had finalised the acquisition of British media services company Red Bee Media, which "has strengthened Ericsson's position in the transforming television and media industry".

Ericsson shares were up by 7.86 percent in mid-afternoon trading on the Stockholm bourse, where the main index was 0.44 percent higher.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.

SWEDEN AND UKRAINE

Ericsson suspends all Russia operations indefinitely

Swedish network equipment maker Ericsson said Monday that it was suspending all of its Russian operations over the war in Ukraine for the foreseeable future.

Ericsson suspends all Russia operations indefinitely

The telecom giant already announced in late February that it would stop all deliveries to Russia following Moscow’s February 24 invasion of Ukraine.

“In the light of recent events and of European Union sanctions, the company will now suspend its affected business with customers in Russia indefinitely,” Ericsson said in a statement.

The company added that it was “engaging with customers and partners regarding the indefinite suspension of the affected business.”

“The priority is to focus on the safety and well-being of Ericsson employees in Russia and they will be placed on paid leave,” it said.

READ ALSO: How has Sweden responded to Putin’s war in Ukraine so far?

Hundreds of Western firms ranging from Ikea to Coca-Cola, Goldman Sachs and McDonald’s have stopped operations in the country since the invasion, with French banking group Societe Generale announcing Monday it was selling its stake in Russia’s Rosbank.

Ericsson has around 600 employees in Russia, and is a “major supplier to the largest operator MTS and the fourth largest operator Tele2,” a company spokeswoman told AFP, adding that together with Ukraine, Russia accounts for less than two percent of revenue.

As a result, the equipment maker said it would record a provision for 900 million Swedish kronor ($95 million, 87 million euros) for the first quarter of 2022 for “impairment of assets and other exceptional costs,” though no staff redundancy costs were included.
Ericsson is due to publish its first quarter earnings on April 14.

SHOW COMMENTS