Ericsson, the world's biggest mobile network maker, reported softer second-quarter earnings than expected on Friday, posting flat sales in its key European market and disappointing the market in its multimedia drive.
But it said it continued to outperform the market and that it was encouraged by robust revenue in the Asia-Pacific region.
Ericsson said second-quarter pretax profit rose to 9.3 billion Swedish crowns ($1.40 billion) from 8.3 billion a year earlier. That compared with an average forecast of 9.8 billion crowns in a Reuters survey.
Sales totaled 47.6 billion crowns in the second quarter, just missing a 47.8 billion forecast.
The company said cash flow from operations rose to 4.2 billion crowns from 200 million crowns a year earlier. Cash flow has been a worry for investors as it has been declining for several quarters.
As the Sweden-based company has relied more on large turnkey projects, its cash flow as a percentage of earnings has skidded, introducing an element of uncertainty for the stock market.
Analysts said the report was mixed.