Ericsson reported second-quarter net sales of SEK 52.7 billion, a 6% reported decline and a 1% organic decline year over year, while adjusted gross margin improved to 48.4% from 48.0%. Adjusted EBITA margin edged down to 13.1% from 13.2%, and net income fell to SEK 4.1 billion from SEK 4.6 billion. IPR licensing revenues dropped to SEK 3.4 billion from SEK 4.9 billion due to a prior-year settlement, but the company reached an annualized IPR run rate of SEK 13.5 billion after signing new agreements in July. Networks segment sales declined 8% reported to SEK 33 billion, while Cloud Software and Services grew 5% organically to SEK 14.7 billion with an adjusted EBITA margin of 12.4%, a new high. Enterprise sales fell 19% reported, largely from the iconectiv divestment. Free cash flow before M&A was SEK 0.4 billion, weighed by a SEK 5 billion inventory build-up of finished goods for planned third-quarter deliveries. For the third quarter, Ericsson expects Networks sales growth above the three-year average quarter-over-quarter seasonality and an adjusted gross margin of 48% to 50%, reflecting a higher share of rollout projects. Management flagged rising component costs, particularly in semiconductors, as a growing headwind and is pursuing price increases, product redesigns, and cost actions to mitigate the impact.
Telefon AB L.M. Ericsson Series AAdjusted gross margin improved to 48.4% and Cloud Software and Services achieved record EBITA margin of 12.4%.
Telefonaktiebolaget LM Ericsson (publ)Adjusted gross margin improved to 48.4% and Cloud Software and Services achieved record EBITA margin of 12.4%.