Ericsson's Q1 Profit Grows Unexpectedly

Telecom equipment maker Ericsson (ERICb.ST) has reported a first-quarter adjusted profit that beat expectations and said sales might stabilize in the second half of the year despite weak demand for 5G gear, as reported by Olivier Sorgho for Reuters.

The profit included a one-off gain of 1.9 billion crowns related to the resolution of a commercial dispute. I Photo: Kārlis Dambrāns Flickr

Operating profit excluding restructuring charges grew unexpectedly to 4.3 billion crowns ($394.40 million) from a year-earlier 4.0 billion despite a 15% sales drop. Analysts polled by LSEG on average forecast a drop to 1.7 billion crowns.

The profit included a one-off gain of 1.9 billion crowns related to the resolution of a commercial dispute, Ericsson said.

The Swedish group expects the Radio Access Network (RAN) market to keep falling at least through the end of the year as customers hold back on investments, but added: "If current trends persist, we expect our sales to stabilize during the second half of the year, benefiting from recent contract wins and the normalization of customer inventory levels in North America."