Ericsson stumbles in opening half

Ericsson blames currency headwinds for a lack of year-on-year sales growth in the second quarter and first half of 2013, which resulted in a 73% drop in net income in the opening six months.
 
The firm made 2.7 billion Krona (€314 million) in 1H13 compared to 10 billion in 1H12, as sales grew a marginal 1% year-on-year. Income for 2Q13 provides a brighter picture, growing 26% to 1.5 billion Krona, however sales for the quarter were also flat on 2Q12.
 
President and chief executive, Hans Vestberg, says the firm faced foreign exchange problems in Japan during the quarter, without which it would have recorded a 7% rise in sales year on year. Business in Europe and North America remained solid, but the outlook in North East Asia remained “challenging” as demand for GSM equipment falls.
 
Ericsson’s 2Q sales disappointed analysts polled by Bloomberg, and led to speculation the firm is beginning to feel the heat from rival Huawei, which ABI Research analysts note closed the gap in the early part of the year.

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