Ericsson net profit rebounds 76% in Q214

Ericsson reported stable revenue but a healthy increase in profit as higher-margin mobile broadband capacity projects had a positive impact, along with growth in the Middle East, China and India.

The company reported sales of SEK54.8 billion (US$8.04 billion), down one per cent year-on-year but up 15 per cent on the previous quarter. Net profit was SEK2.58 billion, up 76 per cent from the same quarter in 2013 (and up 57 per cent quarter-on-quarter).

Capacity projects in advanced LTE markets have been particularly beneficial to the company’s financial performance.

Ericsson’s gross margin was 36.4 per cent in the second quarter, compared with 32.4 per cent a year earlier. Lower restructuring charges and increased patent income also played a part in this.

Ericsson president and CEO Hans Vestberg said the investment climate in India is improving, following spectrum auctions held in May. Revenue from India during the second quarter was SEK1.6 billion, up 29 per cent year-on-year.

The Middle East also saw healthy growth, generating SEK4.5 billion in sales, a 13 per cent year-on-year increase.