STOCKHOLM — Swedish telecoms giant Ericsson returned to profit in 2024 and sales inched up in the final quarter of the year, it said Friday, as the sector struggles with slowing demand for 5G network equipment.
Ericsson registered a net profit of 400 million kronor ($36.6 million) for the full year after a loss of 26.1 billion kronor a year earlier, the result of an October 2023 write-down on the value of US cloud operator Vonage, which Ericsson acquired in 2022.
Chief executive Borje Ekholm said the fourth quarter marked “a strong end to 2024”.
“We progressed well against our strategic plan and generated strong free cash flow,” he said in a statement.
Ericsson’s share price tumbled 8.5 percent to 89.24 kronor in morning trading on the Stockholm exchange, as operating profit adjusted for impairments came in lower than expected at 9.8 billion kronor.
A bellweather for the health of the telecoms market, Ericsson said its sales inched up one percent to 72.9 billion kronor in the fourth quarter, just above Bloomberg’s consensus of analyst forecasts of 72.4 billion.
Sales rose by 54 percent in North America and also grew in Europe and South America, but fell in India amid operators’ declining investments, Ericsson said.
The company reported an adjusted gross margin of 46.3 percent for the final quarter.
It said it remained cautious for the 2025 outlook, saying only that it saw signs the market for radio access networks (RAN) — a major component of a wireless telecommunications systems — “is now stabilising”.
Investors have been watching for signs of recovery from the telecoms equipment market, which has struggled the past year with operators’ sluggish investments in saturated markets and slowing growth in India.
Cautious on Trump
Ericsson, which makes 30 percent of its sales in North America, was also cautious about the potential impact of tariffs that could be imposed by US President Donald Trump.
“Tariffs could have an impact going into 2025 but … we’re all waiting a little bit to see what is going to happen there,” chief financial officer Lars Sandstrom said as he presented the earnings report.
“But we are working on that, continuously, trying to balance and utilise the system we have,” he said, adding that the company could consider transferring production from one site to another if necessary.
Financial daily Dagens Industri revealed this week that Ericsson donated 5.5 million kronor to Trump’s inauguration committee, a first for the Swedish group.
“We have a very big market share in the US and we have to be able to work with whoever is in the White House,” Ekholm told the Swedish news agency TT on Friday.
The company is one of the world’s top three mobile network providers, along with China’s Huawei and Finland’s Nokia. — AFP
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