L.M. Ericsson announced its second-quarter earnings Thursday, reporting net profits of $744 million during the quarter, a 16-percent increase in profits from the second quarter of 2004 when Ericsson reported net profits of $641 million. The Swedish vendor said its North America sales are recovering, noting 31-percent year over year growth following operator consolidation.
“The activity level in emerging markets is accelerating, which means more people have access to communication services,” said Chief Executive Carl-Henric Svanberg. “In parallel, operators seek new ways of working to meet the global trends of increased tariff competition and convergence of technologies and services.”
Sales rose from $4.18 billion to $4.92 billion, an 18-percent increase. In addition to North America, Ericsson reported strong sales in Latin America and Central Europe, the Middle East and Africa. The company’s revenues were up 7 percent year over year in Western Europe and 8 percent in Asia, where operators are expanding their GSM networks and testing third-generation technology.
“The W-CDMA rollout continues, and Cingular Wireless’ rapid buildout plan in the U.S. is driving the industry forward,” Ericsson said. “When complete, Cingular’s buildout will have contributed to doubling the installed W-CDMA base outside of Japan.”
Ericsson’s gross margin came in at 45.9 percent, close to the 45 percent Ericsson had repeatedly said it expected to sustain, but slightly below analyst forecasts of 46.7 percent.
The vendor increased slightly its 2005 outlook, saying it believes the global mobile systems market will show moderate growth compared with 2004. Ericsson had previously estimated slight growth in 2005 compared with 2004.
