Source: Ericsson.

Telecommunications equipment and services veteran Ericsson (NASDAQ:ERIC) just reported results for the second quarter of fiscal year 2014. Reacting to the news, Ericsson shares are trading about 8% higher on the Stockholm exchange; American Depositary Receipts trading on the NASDAQ are also heading 8% higher in Friday's pre-market action.

In the second quarter, Ericsson's sales declined 1% year-over-year to $8 billion. Adjusted earnings rose 22% to $0.16 per diluted share. Operating margins jumped from 4.5% in the year-ago period to 7.3% in this report, but operating cash flows fell 52% year-over-year to $308 million.

Wall Street analysts had pegged Ericsson's earnings at $0.16 per share and per ADR, with revenue projections at $7.9 billion. The report was in line with earnings estimates and exceeded analysts' sales targets. Ericsson surpassed the consensus targets on sales, earnings, and gross margins provided by European analysts.

Ericsson's sales had been lagging in key markets like China, India, and the Middle East, but these markets showed signs of recovery in the second quarter.

North American revenues declined 1% year-over-year, but surged 24% from a soft first quarter. This is Ericsson's largest geographical segment today, representing 28% of total sales. Europe as a whole stops at 23% in second place, reflecting a solid quarter in Northern and Central Europe but weakness in the Mediterranean market.

In a prepared statement, Ericsson CEO Hans Vestberg highlighted 4G/LTE installations in China and Taiwan as a strong growth driver. India is also lining up for growing telecom orders after a series of government elections and wireless spectrum auctions in May.

"In a transforming ICT market, we continue to evolve through investments in both our core business as well as in new and targeted areas," Vestberg said.

In comments to Swedish media, Vestberg didn't seem impressed by the surging market reaction to this report.

"It was an OK quarter," he told wire service Nyhetsbyrån Direkt.