Ericsson’s quarterly core profit misses expectations

Ericsson’s quarterly core profit misses expectations

STOCKHOLM (Reuters) -Sweden’s Ericsson on Tuesday reported first-quarter core earnings that missed expectations as telecom customers in high-margin countries such as the United States held back on spending on 5G equipment.

The company’s quarterly adjusted operating earnings fell to 3 billion Swedish crowns ($290.03 million) from 4.7 billion crowns a year earlier, missing analysts’ mean forecast of 3.28 billion, according to Refinitiv data.

Ericsson, which announced plans to cut 8,500 employees in February, has seen overall margins erode as growth now mainly comes from fiercely price competitive markets such as India rather than high-margin markets like the U.S.

Its reported gross margin for the quarter fell to 38.6% from 42.3%.

However, net sales rose 14% to 62.6 billion crowns, beating estimates of 60.43 billion.

($1 = 10.3438 Swedish crowns)

(Reporting by Supantha Mukherjee in Stockholm, editing by Terje Solsvik)