5G preparation drives Ericsson in Q2, but not in LatAm

Swedish telecoms equipment manufacturer Ericsson posted improved sales growth at its core networks division, driven by investments of US operators in 5G networks.

The company has been undergoing a major global restructuring for the past two years to cut costs and improve margins. CEO Börje Ekholm said in a conference call that "all the hard work is paying off, with good performance in the turnaround process in Q2."

"We see networks returning to growth, there is a lot of work that remains, but the traction is very good," said the CEO. However, Ericsson's increased R&D spending and restructuring costs impacted overall costs in Q2, widening its net loss.

Ekholm declined to disclose where exactly 5G launches will occur in the US. The first implementations will be of fixed-wireless accesses.

On the outlook, Ericsson said it expects to complete the sale of its Media Solutions unit by the end of Q3.

LATAM

For now, Latin America remains out of Ericsson's works with telecom operators on the road to 5G. In Q2, Europe and Latin America sales were stable year-over-year. In FX adjusted terms, there was a 3% decline.

Ericsson no longer reports Latin American results separately. The region is led since April 2017 by Arun Bansal, the head of the Europe and Latin America market area.

The company said that continued sales growth in parts of Europe and Latin America was offset by a decline in certain markets. Managed services sales declined year-on-year in the two regions "as a consequence of addressing non-strategic contracts."

Ericsson reports 11,000 people working in Latin America, across 34 different countries and territories.

Ericsson's detailed results can be found here.