Ericsson swung to a second-quarter profit as cost-cutting measures boosted margins, even as the Swedish telecommunications-equipment maker's revenue declined.
The company on Tuesday reported a net profit of 4.6 billion Swedish kronor, compared with a net loss of 11.0 billion kronor a year earlier, when results were hit by an 11.4 billion kronor impairment charge.
Reported sales fell 6% to 56.1 billion kronor, which the company said included a negative currency impact of 4.7 billion kronor.
Sales adjusted for currency effects and divestments grew 2%, driven by its Americas market and intellectual property licensing revenues, while investments in India were on hold, according to the company.
Ericsson's adjusted operating margin, a key profitability metric, rose to 13.2% from 6.8% a year ago, reaching what the company described as a three-year high.
"Our Q2 results demonstrate solid execution of our strategic and operational priorities," Chief Executive Börje Ekholm said in a statement.
"We achieved a three-year high in adjusted EBITA margin, supported by continued efficiency actions. We have structurally lowered our cost base and are strongly focused on delivering further efficiencies."
Free cash flow before mergers and acquisitions fell to 2.6 billion kronor from 7.6 billion kronor in the prior-year period.
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