Swedish telecom gear maker Ericsson reported a smaller-than-expected 7% drop in second-quarter sales on Friday as sluggish demand for 5G gear in most markets was slightly offset by 14% growth in North America.

Revenue dropped to 59.9 billion crowns ($5.69 billion) from 64.4 billion crowns a year ago. Analysts, on average, had forecast revenue of 58.3 billion crowns in an LSEG poll.

Ericsson and rival Nokia have had to slash thousands of jobs as customers buy less 5G telecom equipment.

Both companies were more upbeat in April, however, projecting a stronger second half of the year.

"We expect market conditions to remain challenging this year, as the pace of India investments slow. However our sales will benefit during the second half from contract deliveries in North America," said CEO Börje Ekholm in a statement.

The group's adjusted gross margin widened to 43.9%, from 38.3% a year earlier.

($1 = 10.5104 Swedish crowns)

(Reporting by Olivier Sorgho; Editing by Anna Ringstrom and Janane Venkatraman)