STOCKHOLM (Reuters) – Sweden’s Ericsson on Friday reported fourth-quarter core earnings ahead of market estimates on the back of strong sales of 5G equipment while the company continued to benefit from the ban of China’s Huawei in several countries.
The company’s quarterly adjusted operating earnings rose to 11 billion Swedish crowns ($1.32 billion) from 6.5 billion crowns a year earlier, beating the mean forecast of 8.58 billion crowns, according to Refinitiv estimates.
Sales at its Networks unit rose 20% with gross margin climbing to 43.5% from 41.1%.
“This reflects continued high activity levels in North America and North East Asia, and also in Europe where we further increased the market share,” Chief Executive Börje Ekholm said in a statement.
The upbeat results capped an eventful year that saw increased deployment of telecom networks as operators added capacity due to the coronavirus pandemic and several countries, including Sweden, followed the United States in banning its rival Huawei from 5G networks.
The Swedish firm, which unlike Nordic rival Nokia got 5G radio equipment contracts from China’s three largest telecom operators, has been vocal about the exclusion of the Chinese company from Sweden.
The Swedish telecom regulator’s decision to exclude Chinese vendors from 5G networks may create exposure for our operations in China, Ekholm said.
Total revenue rose 5% to 69.6 billion crowns, beating estimates of 68.35 billion crowns.
Gross margin surged 40.6% in the quarter from 36.8% in the year-ago period. [nWkr37HH50)
(Reporting by Supantha Mukherjee in Stockholm; editing by Johannes Hellstrom and Sherry Jacob-Phillips)
