Ericsson shares leapt 8% to their highest level in nearly two years on Friday, after the Swedish telecom giant’s revenue declined less than expected in the second quarter.
Net sales fell 7% year-on-year to 59.8 billion Swedish kronor ($5.68 billion) in the second quarter, better than the 58.3 billion kronor forecast in an LSEG poll of analysts.
Shares reached their highest level since September 2022, despite the company also reporting a net loss of 11 billion kronor, down from a 2.6 billion profit in first quarter of the year. Shares were trading up 6% as of 9:40 a.m. London time.
Ericsson CEO Börje Ekholm flagged the firm’s return to growth in North America, where sales increased 14%, along with gross margin expansion.
“We remained focused on matters in our control, to optimize our business amid a challenging market environment, with industry investment levels unsustainably low,” Ekholm said in a statement.
While once known for telephone operations and mobiles, Ericsson now focuses on producing 5G network infrastructure and cloud software. But along with rivals such as Finland’s Nokia, Ericsson has struggled with lower-than-expected spending in the 5G space.
Ericsson scored a major coup over Nokia late last year when it won a major contract with industry juggernaut AT&T to develop its open radio access network (Open RAN) in the U.S.
The telecom giant has meanwhile targeted India as a key growth market, with Ekholm telling CNBC in January that the country had built out 5G at an “unprecedented” rate, but that pace was now normalizing.
In Friday’s results, the CEO reiterated that market conditions were expected to remain challenging in the second half as the pace of India investments slows. He added that sales would benefit from contract deliveries in North America.