Big boost for Sweden’s Ericsson as profits rise

Big boost for Sweden's Ericsson as profits rise
Ericsson's office in Stockholm. Photo: Jessica Gow/TT
Swedish telecommunications giant Ericsson reported an unexpected jump in profits on Friday, with shares rising following the news.

Ericsson's earnings for the second quarter of 2015 amounted to three billion kronor ($350 million) before tax – well above analysts’ expectations. 

But the company’s CEO Hans Vestberg was cautious about celebrating the results, saying the company had taken “positive” steps following a more disappointing first quarter but needed to keep working hard to reach its long term goals.

“We want to gradually improve right now,” he said in a video statement in English.

Vestberg noted that there had been a growth in seven out of ten regions, with a boost in the United States following a dip at the start of the year. He said the company was focused on growing its professional services sector as well as its mobile broadband industry.

“With our ongoing strategic initiatives we are well positioned to continue to create value for our customers in a transforming market,” he said in a separate written statement.

The company has recently been undergoing a major restructuring programme, with more than 2000 posts cut in Sweden in 2015.

Shares in Ericsson rose sharply on the Stockholm Stock Exchange following the firm’s profit announcement, up 5.8 percent after just 20 minutes of trading.

Several other global Swedish companies also announced positive financial news on Friday.

White goods giant Electrolux reported a pre-tax profit of 815 million kronor during the second quarter, a strong contrast to a loss of 120 million in the corresponding period last year.

Volvo AB announced its profits had almost doubled to 6.362 billion kronor, compared to 3.364 billion 12 months ago.

Engineering group Sandvik reported a profit before tax of 2.4 billion kronor, meeting analysts’ expectations and up from 2.1 billion this time last year.

But telecoms firm TeliaSonera failed to reach its predicted 5 billion kronor profit, instead reporting 4.7 billion kronor. 

Aerospace and defence group Saab and tobacco firm Swedish Match also saw their profits dip.