Ericsson sales down 7% despite US growth
July 12, 2024
Ericsson has reported second quarter results for 2024. Börje Ekholm, President and CEO, commented: “In Q2, we maintained our leading market position, returned to growth in North America, and delivered strong gross margin expansion and free cash flow. We remained focused on matters in our control, to optimise our business amid a challenging market environment, with industry investment levels unsustainably low.”
“Vonage remains foundational to build out a global platform for network APIs. This is critical for the digitalization of enterprises and society, and will drive future growth in the telecoms industry. We recorded an impairment charge in Q2, as market growth in the current business has slowed, and we must now refocus on improving performance. Our results highlight our competitiveness, and we will continue to take proactive steps to position the business for longer-term success. We expect market conditions to remain challenging this year, as the pace of India investments slow, however our sales will benefit during the second half from contract deliveries in North America,” added Ekholm.
Financial highlights
- Sales declined -7 per cent YoY, but market area North America grew by 14 per cent. Reported sales were SEK 59.8 billion (€5.21bn).
- Adjusted gross income increased to SEK 26.3 billion driven by strong gross margin expansion. Reported gross income was SEK 25.8 billion.
- Net income (loss) was SEK -11 billion, including a SEK -11.4 billion impairment impact. EPS diluted was SEK -3.34.
- Free cash flow before M&A was SEK 7.6 billion benefiting from a strong improvement in working capital.
Strategic highlights
- Delivering on network technology leadership strategy; externally recognised as 5G leader for 4th consecutive year.
- Further progress to build its Global Network Platform for network APIs with two additional partnerships in Q2.
- New 5G patent licensing agreement signed; on track to deliver the SEK 12-13 billion IPR revenue target for 2024.