Telecoms equipment giant Ericsson reported upbeat second quarter earnings and sales growth that outdid rivals Lucent, Motorola and Alcatel and raised its forecast for the mobile phone networks market. Sales gained from the early booking of 2 billion crowns ($256 million) for rolling out the network of top US mobile company Cingular, and Ericsson CEO Carl-Henric Svanberg said on Thursday the group was clearly growing faster than the market.
Second quarter pretax profit climbed around 16 percent to 8.5 billion crowns, beating analysts' forecasts.
Ericsson shares rose after the result, in contrast to a collapse in the price of Finnish rival Nokia, which on the same day disappointed with a weaker-than-expected quarter.
Ericsson's growth was aided by European operators competing for clients by upgrading networks. Emerging markets, where Ericsson competes with rivals such as China's Huawei, for the first time reported more sales than mature markets.
Analysts generally hailed Ericsson's numbers as good, although some were wary about prospects for further improvement.
Ericsson upgraded its forecast for total mobile systems sales this year to moderate growth from slight.
"We believe that we will get growth in the market place of higher single digits," Svanberg told a news conference.
The market as a whole grew 12 or 13 percent in the quarter, he added, while Ericsson expanded sales by almost 20 percent. "We are clearly taking market share," he said.
The second quarter pretax profit of 8.5 billion crowns beat the average forecast in a Reuters poll of 7.7 billion and was higher than the 7.3 billion a year earlier.
Revenues were 38.4 billion crowns, up 18 percent from the year-ago period and above forecasts of 35.11 billion crowns.Ericsson's closely-watched gross margin, however, was at 45.9 percent, below the forecast 46.8 percent and down from the first quarter's 48.5 percent.
Operating margin was 21.6 percent, above a forecast 21.3 percent and 21.0 percent in the first three months.
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