Ericsson Earnings Tout 5G Growth

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Ericsson (NASDAQ: ERIC) announced its Q1 Earnings for 2021 yesterday. Börje Ekholm, President and CEO said the strategy, built on increased investments in R&D for technology and cost leadership, continued to bear fruit in the first quarter of 2021. 

“We saw organic sales growth of 10 percent, primarily driven by market share gains in Networks,” Ekholm said. “Adjusting for declining IPR revenues, organic sales  growth was 14 percent. Gross margin improved to 42.9 percent and margin increases in all segments more than offset lower IPR licensing revenues. Our EBIT margin increased to 10.7 percent despite significant investments in our business and headwind from currency. We are well positioned to take advantage of the continued market momentum with a competitive 5G product portfolio and cost structure.” 

The company reported networks sales grew organically by 15 percent, despite a decline in IPR licensing revenues. This growth, Ekholm said, is reflecting continued high activity levels in all market areas, except in the Middle East and Africa. 

“We continued to grow market share in the quarter with strong order intake,” he said. “Our increased R&D investments have accelerated product development, evidenced by our recently launched lightweight, energy-efficient Massive MIMO radios for 5G mid-band as well as the Cloud RAN portfolio. These are complementing our radio portfolio, giving customers more deployment options and are receiving good customer traction. We expect the overall market to develop favorably during 2021. We intend to continue to invest for market share gains as well as supply chain resilience during the rest of the year,” he said.

The report cited a strong momentum in the global 5G demand with lead markets moving forward at high pace, creating opportunities for Ericsson to grow its core business.

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