.July 12, 2024 09:59:00 AM

Ericsson AB (NASDAQ:ERIC) shares rose over 2% pre-market after beating Q2 earnings expectations. Adjusted earnings before interest and taxes increased 14% to 3.23 billion kronor, surpassing the 2.7 billion kronor forecasted by analysts. CFO Lars Sandstrom highlighted the need for ongoing cost reduction, with a significant portion of expenses related to personnel. Net sales for the quarter fell by 7% to 59.8 billion kronor, exceeding analyst expectations of 58.5 billion kronor. The adjusted earnings did not include a previously announced impairment related to its Vonage business.

Ericsson reported an 11.4 billion kronor non-cash impairment due to the declining performance of the Vonage unit, resulting in a net loss of 11 billion kronor for the period. This is the second writedown for the asset since Ericsson acquired it in 2021. The impairment impacted the company’s financials for the quarter, highlighting the challenges faced by the Vonage business unit.