Ericsson AB announced its financial results for the first quarter on Friday. Its sales were down, but losses narrowed sharply in the quarter amid its turnaround efforts.
Chief Executive Officer, Borje Ekholm said the company continued to execute on its focused business policy. He added that Ericsson’s efforts to enhance efficiency in service delivery has started to yield results.
The Swedish telecommunications-equipment company posted revenue of 43.41 billion Swedish kronor or approx. $5.2 billion in the first quarter, down 9 percent from the comparable quarter last year. However, its loss decreased to SEK837.0 million, versus a loss of SEK10.07 billion in the same period, one year ago.
Analysts surveyed by FactSet were looking for revenue of SEK43.54 billion and a net loss of SEK1.74 billion.
Ericsson gained market share and its margins improved despite increased spending on its network unit, as the company prepares itself for the industry shift to 5G networks.
The company’s network sales plummeted 10 percent. It also said that the Chinese market is likely to decline this year, though the fall was partially offset by strong growth in Latin America, Europe, Africa and Middle East.
Ericsson said that it continued its investment to expand network and prepare itself for 5G in North America. Speaking about the job cuts, the company reported that it slashed more than 3,000 employees in the quarter that has brought the total number of layoffs to nearly 18,000 since the start of cost-cutting initiatives last year. The annual run-rate of cost-cuts is approx. SEK8.5 billion to date, just short of SEK10 billion target for mid-2018.
Ekholm said the developments in the quarter are encouraging, though more work still needs to be done. Looking forward, the rapidly increasing focus on 5G is expected to continue for Ericsson, besides focus on enhanced mobile broadband, he added.