Ericsson earnings fail to impress

Ericsson’s second quarter results failed to live up to analyst expectations, with revenue remaining flat year-on-year at SEK55.3 billion (€6.4 billion) due to “currency headwind.”

Net income was up 26% year-on-year at SEK1.5 billion, though the firm said it was negatively impacted by losses from divestments and exiting the telecom and power cable operations – which cost SEK0.9 billion.

Hans Vestberg, President and CEO of Ericsson claimed that sales from comparable units, adjusted for foreign currency, grew 7%.

For its networks division, sales were up 1% to SEK28.1 billion, global services sales were up 3% at SEK24.9 billion, but sales at its support solutions unit were down 33% to SEK2.3bn.

Ericsson partly attributed this to “lower media management sales following the strong first half 2012 sales in IPTV and compression.”

Referring to the firm’s recent TV push, Vestberg said: “With the announcement in April and July of the intended acquisitions of Microsoft’s Mediaroom and Red Bee Media, we continue to strengthen our position in TV and media.

“As TV and media converge with telecom we can leverage our strength in media management and managed services. Video is already the single largest contributor to traffic in mobile networks and is expected to grow by 60% annually until 2018.”