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Ericsson’s quarterly core profit misses expectations
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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.
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)
Core profit refers to the earnings generated from a company's primary business operations, excluding any income derived from non-operational activities such as investments or asset sales.
5G equipment includes the hardware and technology necessary to support fifth-generation wireless networks, which offer faster speeds and more reliable connections compared to previous generations.
Adjusted operating earnings are a company's earnings before interest and taxes, modified to exclude non-recurring items, providing a clearer picture of operational performance.
Gross margin is a financial metric that shows the percentage of revenue that exceeds the cost of goods sold (COGS), indicating how efficiently a company produces its goods.
Net sales refer to the total revenue from goods sold or services provided, minus returns, allowances, and discounts, reflecting the actual income generated by a company.
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