Friday, 17 August 2018

5G focus revitalises Ericsson, as Swedish kit maker returns to profitability

By Chris Kelly, Total Telecom
Wednesday 18 July 18

Ericsson has reported an operating profit of 0.2 billion Krona ($23 million) for Q2 2018

Ericsson has beaten analysts' expectations and posted a strong set of financials for Q2 2018, thanks to its renewed focus on 5G projects across the globe. Ericsson has embarked upon a high-profile cost saving initiative, which is responsible for returning the company to a more sound financial footing by 2020…

Ericsson has beaten analysts' expectations and posted a strong set of financials for Q2 2018, thanks to its renewed focus on 5G projects across the globe.

Ericsson has embarked upon a high-profile cost saving initiative, which is responsible for returning the company to a more sound financial footing by 2020. These initiatives have started to bear fruit, and Ericsson's operating margin for Q2 2018 rose to 0.3 per cent, up from -1.1 per cent for the same period last year.

"We continue to execute on our focused business strategy and are tracking well towards our 2020 target of an operating margin of at least 10 per cent. The investments in technology leadership have resulted in increased gross margin to 37 per cent and growth in segment Networks," said Börje Ekholm, president and CEO of Ericsson.

Ericsson's shares have rebounded by 36 per cent since the start of the year, as analysts suspect that a renewed focus on 5G initiatives is going to help to lift the company's finances in the years to come.

"We will continue to invest in securing leadership in 5G. This includes further investments in R&D, to solidify our complete 5G portfolio, and investments in field trials. We also intend to selectively capture new business opportunities, through our 5G-ready 4G portfolio, to extend our footprint as operators prepare for 5G. We provide solutions for all frequency bands for 5G, which strengthens our global competitiveness," Ekholm added

Ericsson enjoyed net sales of 49.8 billion Krona ($5.62 billion) in the second quarter of 2018.

Also in the news: 

Ericsson: The US will be first for 5G and will hit 50% coverage by 2023

Ericsson: 3.5 billion global IoT connections by 2023

Ericsson secures €250m 5G finance package from EIB

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