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Ericsson posts better-than-expected results

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Ericsson, Coronavirus

Swedish telecoms equipment maker Ericsson, one of Europe’s key 5G suppliers, reported Wednesday better-than-expected third quarter results on the back of its highest profitability rating since 2006.

Ericsson posted a three months to September net profit of 5.6 billion kronor (522 million euros, $622 million) compared with a loss in the same period the previous year of 6.9 billion kronor when it had to make large provisions.

Sales were up just 0.6 percent at 57.5 billion kronor.

The company said that while the coronavirus pandemic “has hurt revenues for several of our customers, and in some cases this has led to a reduction of capex (capital expenditure), we have not seen any negative impact on our business.”

ALSO READ: Samsung flags near-60% operating profit jump after Huawei boost

The gross margin — a broad measure of profitability — came in at 43.2 per cent, its highest level since 2006 and compared with analyst forecasts for 39.4 per cent.

“We remain positive on the longer-term outlook for the industry and on Ericsson,” company head Borje Ekholm said in a statement.

Ericsson has emerged as a key player in 5G systems along with Finland’s Nokia and the Chinese group Huawei whose position has come under attack in the United States over allegations it effectively acts on Beijing’s behalf.

Huawei denies the charge but it has steadily been pushed out in the US and increasingly in the EU, leaving Ericsson and Nokia the main 5G suppliers there.

[AFP]

Vanguard News Nigeria.

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