Ericsson AB saw its US-listed stocks tumble on Friday after its second-quarter results highlighted sluggish demand in the US.
The Swedish mobile network manufacturer said it experienced a “sharp decline” in sales in the second quarter, particularly in North America, although it said this was partly offset by growth in India.
For 2Q, the company reported adjusted earnings before interest and taxes of 2.8 billion kronor ($274 million), surpassing the average estimate of 2.6 billion kronor predicted by analysts.
Despite recording a net loss of 600 million kronor primarily due to restructuring charges, the company's net sales grew by 3% to 64.4 billion kronor.
While the global market for radio access networks is expected to stagnate in the coming years, Ericsson's sales in India helped mitigate the anticipated softening in other regions, particularly North America.
Looking ahead, Ericsson anticipates that the 3Q EBITDA margin will be in line with or slightly higher than the previous quarter, with the early impact of its cost-cutting plan becoming evident in the current period.
The company also expects sales to rebound to normal levels in the US market by the fourth quarter.
Despite the company’s positivity, Ericsson’s Nasdaq-listed shares took a hit on Friday morning, falling 10.3% to reach $5.15.
Contact Angela at angela@proactiveinvestors.com
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