Ericsson reports second quarter results 2024

Core Insights - The company reported a decline in net sales by 7% year-over-year, with a total of SEK 59.8 billion compared to SEK 64.4 billion in the previous year, but experienced growth in North America by 14% [12] - Adjusted gross margin improved to 43.9%, up from 38.3%, driven by higher IPR licensing revenue and cost actions, while reported gross margin was 43.1% compared to 37.4% [12] - The company recorded a significant impairment charge of SEK 11.4 billion, impacting net income, which resulted in a loss of SEK 11.0 billion compared to a loss of SEK 0.6 billion in the previous year [12][15] - Free cash flow before M&A was SEK 7.6 billion, a significant improvement from a negative SEK 5.0 billion, benefiting from enhanced working capital management [12] Financial Performance - Adjusted EBITA was SEK 4.1 billion with a margin of 6.8%, compared to SEK 3.7 billion and 5.7% margin in the previous year, while reported EBITA was SEK 2.4 billion, up from SEK 0.5 billion [12] - The company maintained a strong gross margin in its Networks segment at 46.1%, up from 39.3% [12] - The adjusted EBIT margin excluding impairments was 5.4%, compared to 4.4% in the previous year, indicating improved operational efficiency [3] Strategic Developments - The company is focused on building a global platform for network APIs, which is essential for the digitalization of enterprises and is expected to drive future growth in the telecom industry [2] - The company has been recognized as a leader in 5G technology for the fourth consecutive year and has made progress in establishing partnerships to enhance its global network platform [5] - The CEO emphasized the need to optimize business operations amid a challenging market environment, particularly due to low industry investment levels [6]