Ericsson’s gains beat expectations for 5G demand despite China’s setbacks
STOCKHOLM, October 19 (Reuters) – Sweden’s Ericsson (ERICb.ST) reported its third quarter results on market estimates on Tuesday, as strong sales of 5G equipment in most parts of the world offset a loss of market share in China.
The company’s quarterly adjusted operating profit increased to SEK 8.8 billion ($ 1.02 billion) from SEK 8.6 billion a year ago, beating the average forecast of SEK 7.85 billion, according to Refinitiv estimates.
While both Ericsson and its rival Nokia have benefited from the ban on China’s Huawei in several countries, the ban on the Chinese company in Sweden led to a loss agreement for the Swedish company in China.
Ericsson receives just under 10% of its revenue from China.
“As a consequence of the reduced market share on the mainland in China, we plan to change the size of our sales and delivery organization in the country from the fourth quarter,” says CEO Börje Ekholm in a statement.
Sales in mainland China within networks and digital services decreased by SEK 3.6 billion during the quarter.
Total revenues for the telecom equipment manufacturer, a rival from Huawei (HWT.UL) and Nokia (NOKIA.HE), fell 2% to SEK 56.3 billion, without SEK 58.14 billion as analysts saw.
($ 1 = 8.6258 Swedish kronor)
Reporting by Supantha Mukherjee, editing by Anna Ringstrom and Kim COghill
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