Ericsson’s quarterly net profit was lower than expected due to a delayed contract, expiring licensing agreements and the previously announced forecast of 900 million kronor ($ 94.6 million), after the suspension of Russian activities.
However, the company gained market share in the quarter thanks to strong sales for 5G equipment in North America, Europe and Latin America, as total network equipment sales grew organically by 4%.
The Swedish telecommunications equipment group reported a net profit of 2.94 billion kroner compared to 3.17 billion kronor a year ago, as sales rose 11% to 55.06 billion kroner.
Analysts expected net profit of 4.07 billion kroner and sales of 54.14 billion kronor.
Ericsson pointed out that in the quarter there was a charge from a specific annual software contract of 1 billion kroner that is normally recorded in the first quarter, but this year it was delayed for the second quarter.
The higher costs of research and development, the expiration of patent pending renewal agreements, and investment in the supply chain also had an impact.
“In light of the global supply chain challenges, we have decided to create a vital component cushion to ensure that we deliver on our delivery commitments to our customers,” he said.
Source: Capital
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