Ericsson has beaten expectations and slashed fourth quarter losses as it saw growth boosted by increased demand for 5G.
The Swedish telecoms firm said its net loss in the fourth quarter 2018 was 6.5bn Swedish krona (£546m), compared to a loss of 18.5bn krona in the same period the year before.
The slashed debt was driven by a 10 per cent rise in sales to 63.8bn krona, while operating margin improved from -33.3 per cent to -2.9 per cent.
The company had already announced a 6.1bn krona provision amid a restructuring of its Business Support Systems, which it said would impact revenues.
The firm’s operating loss was 1.9bn krona, well below the 3bn krona forecast in a Reuters poll of analysts.
Ericsson said the improved results were a result of rising demand for 5G technology and a successful cost-cutting strategy. It said research and development investments continued to grow in the quarter, but are now expected to flatten out.
Shares in Ericsson were up almost three per cent this morning.
President and chief executive Borje Ekholm said: “Even though costs related to strategic contracts and 5G field trials will impact margins short term, they will help reaching our targets for 2020 and 2022 as well as strengthen our business in the long term.”
Ericsson is competing with Huawei in a bid to rollout new technology for high-speed 5G connections.
Earlier this week Ekholm told CNBC the controversy surrounding the Chinese firm was creating uncertainty in the sector, but refused to comment on whether the scandal had directly impacted Ericsson.