Ericsson Posted Good Results in 4Q20

Ericsson recorded a 60 percent year-on-year jump in net profit in the fourth quarter to SEK7.2 billion ($864 million). Revenue went up 5 percent to SEK69.9 billion. The vendor noted it had improved margins across all segments.

Revenue from its networks division increased 20 percent, credited to improvements across 2020 on its 5G portfolio following SEK10 billion of R&D investments in the years from 2017. In its Digital Services division, the company noted it planned to begin generating cash from its cloud-native 5G products in the next 12 to 18 months, with deals described as significant customer contracts already in place.

The company CEO Borje Ekholm noted Ericsson was gaining market share from all major competitors across its units. Looking to 2021, he added there was an expectation of continued business wins in Europe, though noted the pace of 5G rollout in the region continued to lag some other areas. Ekholm also warned a decision in Sweden to ban Huawei and ZTE’s 5G equipment could impact its business in China. Ericsson won a significant amount of business from China’s operators during 5G tenders, with the company noting the region was critical during its Q3 statement.