STOCKHOLM (Reuters) - Mobile telecom gear maker Ericsson posted second-quarter sales and operating income above expectations on Friday as sales picked up at its key networks unit thanks to growth in the Middle East, China, the United States and India.
In China, Ericsson is selling gear for a massive rollout of fourth generation mobile gear, and is also getting a boost from capacity upgrades in developed markets where telecom operators compete for clients by offering top-notch networks to cope with a surge in mobile data traffic.
"After a slow start of the year, we are executing on previously awarded 4G/LTE contracts in Mainland China and Taiwan," Ericsson Chief Executive Hans Vestberg said in a statement, repeating that key contracts won by the group would boost revenue during the second half of the year.
Operating income was 4.0 billion Swedish crowns (342 million pounds) compared to 2.5 billion in the year-ago quarter, beating a mean forecast of 3.7 billion in a Reuters poll of analysts.
Sales at Ericsson, the world number one mobile network equipment maker, were 54.8 billion crowns against a forecast of 52.5 billion, and inched down by 1 percent from the year-ago quarter on a comparable basis. That was a much smaller decline than the 7 percent fall in the first quarter.
At the networks unit, which accounts for just over half of group revenue, comparable sales grew by 5 percent to a forecast-beating 29.0 billion.
Ericsson's gross margin was 36.4 percent against a mean forecast of 35.4 percent.
(Reporting by Sven Nordenstam and Olof Swahnberg; Editing by Alistair Scrutton)