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Ericsson eeked out a Q1 profit
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It still expects overall RAN sales to fall slightly
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But says it will be insulated by AT&T deal and more
Ericsson is seeing some green shoots for the year as the vendor reported a profit in the first quarter despite a sales drop, and it expects the market to steady as the year progresses.
“External sources estimate that the global RAN market will decline by minus 4%,” Ericsson’s CEO Börje Ekholm said on the earnings call, and despite calling that “optimistic,” the Swedish chief expects that the situation will steady as North American investments grow in the second half of the year.
We will “also see the benefit from the recent contract win we had that we announced in the end of last year,” Ekholm said, talking about the major AT&T contract Ericsson signed late in 2023.
That doesn’t mean it will all be smooth sailing for Ericsson in 2024. The vendor already announced job cuts for 1,200 Swedish staff in March, following major lay-offs worldwide last year.
The CEO said there will be “continuous improvement to actually take cost out” during the Q&A session. He noted that Ericsson had to communicate the Swedish job cuts in March to avoid speculation.
We wonder how rival Nokia's results will shape up in comparison later this week.
Ericsson's operating profit, excluding restructuring charges, rose to 4.3 billion crowns ($394 million) in Q1 from 4.0 billion crowns a year earlier, despite a 15% sales drop. Its shares are up $1.36 to $4.86 on the news.