E*******’s Q2 profit drops 63% on weaker network sales

[umts99]

E******* reported weaker sales and a sharper than expected drop in second-quarter profit as carriers cut back on networks sales. However, the Swedish vendor said that it expects results to improve toward the end of the year.
In the second quarter E******* said its net income fell 63 percent to around $172.9 million, from around $461 million in the year-ago period. Analysts polled by Dow Jones Newswires expected a net profit of $240.6 million.
Overall, the company’s net sales inched up only 1 percent in the quarter, to $7.97 billion. Sales in the company’s networks business slumped 17 percent year-over-year to $4 billion, while sales in E*******’s services business shot up 26 percent to $3.47 billion. The company’s closely watched gross margins slipped to 32 percent, down from 37.8 percent in the year-ago period.