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Key Takeaways
- Ericsson reported better-than-expected revenue on a big jump in North American sales.
- The Sweden-based telcom equipment maker’s overall revenue dropped 7% year-over-year, but was 15% higher in North America.
- The news helped send American depositary receipts (ADRs) of Ericsson to their highest level in nearly two years.
American depositary receipts (ADRs) of Ericsson (ERIC) rose to their highest level in almost two years Friday after the telecom equipment manufacturer posted stronger-than-expected sales in North America.
The firm reported second-quarter revenue fell 7% year-over-year to 59.85 billion Swedish kronor ($5.68 billion), although that exceeded estimates. Because of a SEK11.4 billion impairment charge, Ericsson had a net loss of SEK11.0 billion, and a loss per share of SEK3.34.
Net sales were up 15% in North America to SEK16.6 billion, although overall sales were dragged down by an 11% drop in networks revenue.
CEO Expects ‘Market Conditions To Remain Challenging This Year’
Chief Executive Officer (CEO) Börje Ekholm explained that industry investment levels are “unsustainably low.” However, while the company expects “market conditions to remain challenging this year,” sales will get a boost during the second half “from contract deliveries in North America.”
Ericsson ADRs rose 4.2% to $6.66 as of 10:25 a.m. ET Friday and are up almost 6% year-to-date.
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