Ericsson’s Q1 profit grows unexpectedly, eyes stabilisation of sales in H2
TELECOM equipment maker Ericsson reported on Tuesday (Apr 16) a first-quarter adjusted profit that beat expectations and said sales might stabilise in the second half of the year despite weak demand for 5G gear.
Operating profit excluding restructuring charges grew unexpectedly, to 4.3 billion crowns (S$246.4 million) from a year-earlier four billion despite a 15 per cent sales drop. Analysts polled by LSEG on average forecast a drop to 1.7 billion crowns.
The profit included a one-off gain of 1.9 billion crowns related to the resolution of a commercial dispute, Ericsson said.
The Swedish group said it expects the Radio Access Network (RAN) market to keep falling at least to the end of the year as customers hold back on investments, but added: “If current trends persist, we expect our sales to stabilise during the second half of the year, benefiting from recent contract wins and the normalisation of customer inventory levels in North America.”
“In the second half, our margins should benefit from improved business mix,” it said.
The company already in January predicted markets outside China would keep weakening this year and announced new layoffs in March, having slashed costs and shed thousands of jobs in 2023 as sales slowed after years of high demand for 5G gear.
GET BT IN YOUR INBOX DAILY
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Ericsson on Tuesday forecast a gross margin excluding restructuring charges at the Networks division of 42 to 44 per cent for the second quarter of 2024. In the first quarter, it stood at 44.3 per cent. REUTERS
KEYWORDS IN THIS ARTICLE
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Telcos, Media & Tech
China’s Baidu beats quarterly revenue estimates on ad recovery, cloud demand
Newly privatised Toshiba to cut 4,000 jobs in restructuring drive
Siemens misses profit forecast as industrial business struggles
Microsoft asks hundreds of China staff to relocate, WSJ reports
SoftBank aims to help call centre workers by ‘softening’ angry customer calls with AI
Cisco forecasts fourth-quarter revenue above estimates on enterprise demand