Ericsson exceeds expectations as the Swedish firm benefits from the roll out of 5G networks, offsetting loss of Chinese market share.
Quarterly adjusted operating earnings rose to 11.9 billion Swedish crowns (£951m) from 11 billion a year ago, beating the forecast of 10.30 billion, according to Refinitiv data.
Total revenue rose two per cent to 71.3 billion crowns, beating estimates of 68.33 billion crowns. Sales in mainland China declined by 1.8 billion crowns, meaning that excluding mainland China organic sales growth was five per cent.
A resurgent Nokia increasing competition in several markets and the loss of telecom contracts in China following a ban of Huawei by the Swedish government had been dragging down Ericsson’s revenue.
The proportion of revenue Ericsson earns from China has dropped to around 3%, the company has previously said, from 10-11% before the domestic Swedish ban on Huawei.
Hoping to broaden its 5G portfolio, Ericsson has spent more than $7bn in acquisitions- snapping up cloud communications firm Vonage and wireless network gear maker Cradlepoint.
President and chief exec Börje Ekholm commented: “Based on current business momentum, we expect fundamentals to remain strong in our core mobile infrastructure business during 2022. We will continue to increase investments in R&D to sustain our technology leadership and strengthen our competitive position to take advantage of the rollout of 5G networks.”