Ericsson AB shares surge as cuts aid company

SHARES of Ericsson AB, the world’s largest maker of wireless networks, surged as much as 27% as accelerated cost cuts helped the company post a narrower-than-expected loss in the second quarter.

The net loss was 2.7 billion kronor (€292 million), the same as in the year-earlier period and down from 4.3 billion kronor in the first quarter, chief executive officer Carl-Henric Svanberg said at a press meeting. The pretax loss excluding reorganisation costs and one-time items was smaller than analysts had predicted.

Ericsson’s adjusted pretax loss narrowed to 200 million kronor in the second quarter from 3.08 billion kronor a year earlier. Analysts in an SME Direkt survey predicted a 1.9 billion krona loss on that level. The company’s target of returning to profit is based on that pretax measure.