Telecoms gear maker Ericsson blasted past first-quarter core profit expectations thanks to surging mobile broadband equipment sales, and said it hoped to have post-Japan quake supply problems ironed out by the end of the third quarter.
The tech gear market is recovering after a sharp downturn, and the Swedish company is going into the upswing with lower costs, meaning a strong bottom-line boost from sales growth.
The world's biggest mobile network gear maker posted earnings before interest and tax excluding joint ventures of 6.3 billion crowns ($1.03 billion) versus an average forecast of 5.0 billion in a Reuters poll.
From the first quarter, Ericsson reports headline profit including restructuring charges.
Profit was boosted by a surge in sales at the company's key network unit.
The increase in Group sales was driven by segment Networks where revenues grew 35 percent year-over-year with an EBITA margin of 20, the company said.
Ericsson said it hoped to have lined up alternative suppliers to deal with supply chain problems in the wake of March's earthquake in Japan and an anticipated squeeze on margins due to a shift in business mix failed to appear.
Their EBITDA margin for Networks is 20 percent, which is really good, said Earl Lum, analyst at EJL Wireless.
Japan impact seems to be minimal with stabilization by Q3. Numbers were positive. I don't see any red flags. ($1=6.102 Swedish Crown) (Editing by Louise Heavens)