(Telecompaper) Ericsson reported second-quarter sales flat due to negative currency effects, while profits improved thanks to cost reductions. Revenues were unchanged year-on-year at SEK 55.3 billion, but grew 7 percent if forex effects are excluded. Operating profit rose to SEK 2.5 billion from SEK 2.1 billion a year ago, helping the margin improve to 4.5 percent from 2.8. Ericsson said it was starting to see a small shift in the market away from the lower-margin coverage projects towards capacity orders. Its strategy to gain market share in Europe through network upgrade projects was also starting to pay off in new business, in capacity and LTE projects. Elsewhere the market was weaker in East Asia in the quarter, while LTE orders in Russia and China were starting to come in and mobile broadband demand remained strong in the Americas. Net profit finished up at SEK 1.5 billion versus SEK 1.2 billion a year earlier. The result included SEK 0.9 billion in losses from divestments such as Applied Communication Sciences and exiting the telecom and power cable operations. Operating cash flow improved to SEK 4.3 billion from a negative SEK 1.4 billion a year ago.