Ericsson on Thursday reported a net profit for the third quarter, the first time the Swedish equipment vendor has done so since 2016.
Ericsson has been executing a cost-cutting strategy for the last 18 months, which included shedding thousands of jobs earlier this year and renegotiating or exiting certain contracts. CEO Börje Ekholm said during an investor call that the company’s R&D investments are also paying off.
“Our investments in R&D are paying off with a very competitive 5G ready portfolio,” Ekholm said, according to a SeekingAlpha transcript. “We see now that we’re making progress on our turnaround plan. We see good order intake and good development in large parts of the business.”
Ericsson’s adjusted sales in its networks division were up 5 percent year over year, driven mainly by high activity in North America where operators are commercializing next-generation wireless networks.
Ekholm said North East Asia and North America are leading the way in terms of 5G momentum, but activity is also picking up in Europe.
“So it is increasingly becoming 5G is not only a buzz word but it’s actually true reality,” he noted.
Ericsson’s chief executive pointed to fixed wireless access as a 5G use case that is gaining increasing attention across the vendor’s market. Verizon, for example, launched 5G in-home broadband earlier this month. “Clearly, the case in North America but also in other markets where we see that the interest is pretty substantial,” Ekholm said.
Another factor brought up on the call was the ongoing investigation by U.S. authorities into corrupt practices related to activities more than a decade ago. Ericsson has been cooperating with the SEC since 2013 and the DOJ since 2015 regarding compliance with the U.S. Foreign Corrupt Practices Act.
Ekholm did not provide further details, other than to say that the company has identified relevant facts related to the investigation that have been shared with authorities.
“While the length of the discussions cannot be determined today, but based on the fact that we have shared with the authorities, we believe that the resolution of these matters will most likely result in monetary or other measures taken,” Ekholm said. “And the magnitude of these measures, we can’t estimate today but they may be material.”
See Ericsson’s full Q3 report here.
Filed Under: Wireless Week
