Ericsson Q2 profit beats forecasts

Telecom equipment maker Ericsson reported better-than-expected second-quarter earnings on Tuesday in a mixed report that analysts said offered tentative signs that the firm is turning a corner. Ericsson, the world's No. 1 mobile network maker, beat forecasts for the second consecutive quarter with earnings before interest and tax of 4.7 bln Swedish crowns ($789 mln) excluding restructuring costs, against forecasts for 4.3 bln.
"If you look at the underlying result it was better than we had expected. This is true even if you clean for the 200 mln crown profit for the sale of business exchanges," said David Hallden, analyst at Cheuvreux, referring to the sale of the firm's PBX enterprise operations.
The firm, which earlier this year announced a plan to chop 4 bln crowns off annual costs, said restructuring costs in the second quarter came in at 1.8 bln crowns. That was nearly four times the expected amount of 502 mln.
"The interesting thing is that when you take out the restructuring charge the operating profit is about 10% ahead of expectations, which is okay," said Richard Windsor, analyst at Nomura Securities.
"The worry that margins in Q1 were overstated has now been somewhat relieved."