Ericsson has published financial results for the second quarter| 17.07.2019
Ericsson has presented the financial results for the second quarter of 2019. In General, the dynamics is positive, but it is expected that the costs associated with new contracts for the network
business will affect the margin in the second half of the year.
The company’s sales rose 7 percent to 54.8 billion Swedish kronor against 49.8 billion in the second quarter of 2019. Gross margin also increased to 36.6% against 34,8% in the same period last
year. At this margin excluding restructuring costs remained unchanged – at the level of 36.7 per cent.
Gross margin units of the networks excluding restructuring costs increased to 41.4% vs 40.2%.
According to the obtained results, the reduction of profits in a series of five previous quarters finally stopped. Earlier, shares of Ericsson fell by 7.1 percent to 83,98 kronor in early trading. On
the moment the income from core activities rose to 3.7 billion Swedish crowns versus 0.2 billion a year earlier. The operating margin reached 6.8 percent against 0.3 percent.
The increase in operating income excluding restructuring costs amounted to 3.9 billion vs 2 billion in the second quarter of 2018, and the increase in the operating margin excluding restructuring costs –
7% vs 4.1%.
Net profit for the reached 1.8 billion Swedish kronor against a loss of 1.8 billion in the second quarter of 2018.
The President and CEO of Ericsson, Borje Ekholm tied sales growth of 7%, compared to the second quarter of last year, with contracts deployment technologies
5G and launch of networks in commercial operation in North America and northeast Asia.
In the future, the company plans to enter into new strategic agreements and to continue to improve the coverage of 5G networks in different parts of Asia. She acknowledges that, of course, it will affect
margin, but will strengthen its positions in the long term, as investments in new technology and market development, especially in the segment 5G, automation and artificial intelligence will play
a key role in ensuring the competitiveness of companies for many years. These investments are part of strategy, Ericsson 2020 and 2022.
The company’s equipment is used in 15 5G networks, launched in commercial operation. Some analysts believe that Ericsson would benefit from the current unrest surrounding Huawei,
but the financial Director of the company said that so far have seen no effect.
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