Ericsson fourth quarter core earnings miss estimates

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Ericsson fourth quarter core earnings miss estimates

STOCKHOLM Sweden's Ericsson reported fourth-quarter core earnings that fell short of expectations for the third quarter in a row, as sales of 5 G equipment slowed in high-margin markets such as the United States.

The company's operating earnings excluding restructuring charges fell to 9.3 billion Swedish crowns $902 million from 12.8 billion crowns a year ago. According to Refinitiv data, analysts' mean forecast for core earnings was 11.22 billion.

Net sales rose 21 per cent to 86 billion crowns, beating estimates of 84.2 billion.

A settlement with Apple last month resulted in revenue of 6 billion crowns, but Ericsson took 4 billion crowns in charges, including a provision for a potential fine from the U.S. regulators and divestments.

Ericsson expects to see significant patent revenue growth over the next 18 -- 24 months.

While the U.S. and other markets are slowing down, Ericsson hopes that India will help it balance some of the lower demand for 5 G equipment.

Chief Executive Borje Ekholm said that the growth from share gains in several markets could not fully compensate for reduced operator capex and inventory reductions in other markets, including North America.

The gross margin fell to 41.4 per cent from 43.2 per cent mainly due to business mix change in its Networks business.