Ericsson returned to profitability in 2Q18, although its overall sales decreased by -1% YoY (adjusted for comparable units and currency). Ericsson’s Networks group showed a sales growth of 2% YoY, with strong growth in North America, where mobile operators are now engaged in pre-5G rollout activities
“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%. The investments in technology leadership have resulted in increased gross margin1 to 37% (31%) and growth in segment Networks,” stated Börje Ekholm, President and CEO of Ericsson.
The first two use cases that Ericsson is seeing for 5G are:
(1) Managing the growth in mobile data traffic
(2) Fixed broadband access over 5G
Some highlights for the quarter:
- Gross margin was 34.8% (29.1%).
- Gross margin excluding restructuring charges improved to 36.7% (30.9%), driven mainly by cost reductions and the continued ramp-up of Ericsson Radio System (ERS).
- Operating expenses were SEK 17.2 (15.4) b. Operating expenses excluding restructuring charges increased to SEK 16.3 (14.8)
- Operating income was SEK 0.2 (-0.5).
- Operating income excluding restructuring charges was SEK 2.0 (1.0).
- Ericsson’s total workforce was reduced by more than 2,000 in the quarter and by 20,500 in total since last year.
https://www.ericsson.com/en/press-releases/2018/7/ericsson-reports-second-quarter-results-2018
