Ericsson (0O87:LSE) recorded a higher-than-expected net profit in the second quarter of this year, but warned that the delayed roll-out of 5G in China is weighing on sales. This was shown by quarterly figures from the Swedish telecommunications equipment manufacturer.
In the last quarter, net profit was 3.7 billion Swedish Krona, equivalent to 362 million euros, compared to 2.5 billion kronor a year earlier.
Revenue fell by 1.1 percent to 54.9 billion kroner, mainly due to a decrease of 2.5 billion kroner in China.
Analysts consulted by FactSet accounted for a net profit of 3.6 billion kroner and a turnover of 57.3 billion.
Ericsson (0O87:LSE) warned earlier that a Swedish ban on Chinese equipment in the country would have an impact on the company. Ericsson now predicts a lower market share in China for its digital services and network.
Sales of network equipment increased by 11 percent on a customised basis, with Ericsson seeing continued high demand in most markets. The gross margin of this division increased from 40.5 to 47.9 percent.
Ericsson [0O87:LSE TELEFONAKTIEBOLAGET LM ERICSSON] also said that it would increase production to meet customer demand. In a separate press release, it was also announced that Ericsson closed a multi-year 5G deal with Verizon worth $ 8.3 billion.