STOCKHOLM (AFP) – Swedish telecoms giant Ericsson returned to profit in 2024 and sales inched up in the final quarter of the year, it said yesterday, as the sector struggles with slowing demand for 5G network equipment.
Ericsson registered a net profit of SEK400 million (USD36.6 million) for the full year after a loss of SEK26.1 billion a year earlier, the result of an October 2023 write-down on the value of United States (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 per cent to SEK89.24 in morning trading on the Stockholm exchange, as operating profit adjusted for impairments came in lower than expected at SEK9.8 billion.
A bellweather for the health of the telecoms market, Ericsson said its sales inched up one per cent to SEK72.9 billion in the fourth quarter, just above Bloomberg’s consensus of analyst forecasts of SEK72.4 billion.
Sales rose by 54 per cent 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 per cent 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.
Ericsson, which makes 30 per cent 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.
