Swedish telecom equipment maker Ericsson, one of Europe’s key 5G providers, reported better-than-expected third-quarter results on Wednesday thanks to its highest profitability rating since 2006.
Ericsson posted a three-month net profit through September of 5.6 billion crowns (522 million euros, $ 622 million) compared to a loss in the same period last year of 6.9 billion crowns when it had to make large provisions.
Sales increased just 0.6 percent to 57.5 billion crowns.
The company said that while the coronavirus pandemic “has affected the revenues of several of our clients, and in some cases this has led to a reduction in capital spending (capex), we have not seen any negative impact on our business.”
Gross margin, a broad measure of profitability, stood at 43.2%, its highest level since 2006 and compared to analyst forecasts of 39.4%.
“We remain positive about the long-term outlook for the industry and about Ericsson,” said company director Borje Ekholm in a statement.
Ericsson has become a key player in 5G systems alongside Finland’s Nokia and the Chinese group Huawei, whose position has come under attack in the United States over accusations that it is effectively acting on behalf of Beijing.
Huawei denies the charge, but has been steadily ousted in the US and increasingly in the EU, leaving Ericsson and Nokia as the top 5G providers there.
[AFP]
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