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Ericsson doing well on the back of 5G

by on21 April 2021

Would have been better if it had not been for that pesky Samsung

 Sweden's Ericsson reported first-quarter core earnings above market estimates as strong 5G equipment sales offset a loss of royalty income due to a patent fight with Samsung Electronics.

The son of Eric said that the coronavirus crisis has fast-tracked 5G adoption as governments prioritise digital growth, boosting telecom equipment makers such as Ericsson.

Quarterly adjusted operating earnings rose to $627.9 million beating Wall Street’s expectations.

Total revenue, which benefited from bans in several countries on the use of technology from China's Huawei, was unchanged from last year due in part to currency headwinds and below estimates.

Sales at Ericsson's networks unit grew by 15 percent and adjusted gross margin rose to 42.9 percent from 40.4 percent. Revenue was hit by the fight with Samsung over patent licence royalties.

Chief Financial Officer Carl Mellander said the company was continuing both with the legal track, as well as the negotiation track and it was "hard to predict any sort of firm timeline" for a resolution.

Technology patent disputes can run for years and royalty payments can be recouped depending on the resolution. The last dispute between these two firms was resolved in 2014 after two years.

Nokia, which reports results next week, has settled patent disputes with Samsung and Lenovo in the past two months.

Ericsson said it expected the 5G equipment market to develop favourably in 2021 and that it had overcome a global semiconductor shortage affecting a range of industries.

Chief Executive Borje Ekholm said: “With proactive and continuous measures for supply chain resilience we have to date been able to manage the global semiconductors shortage situation without impact on our customer deliveries"


Last modified on 21 April 2021
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