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Ericsson: fourth-quarter results up, but margins challenging

(CercleFinance.com) - Ericsson on Friday said that its sales and profit rose in the fourth quarter, a performance that puts the Swedish company on track to reach its targets for 2020 and 2022.

Excluding restructuring costs, the world's biggest telecom network maker made an operating profit of 6.5 billion Swedish kronor in the past quarter, more than double the 2.6 billion kronor a year ago.

Group gross margin was 37.1% excluding the restructuring costs, compared with 32% a year earlier.

Sales were 66.4 billion Swedish kronor, up 1% when adjusted for comparable units and currency.

The reduction in North America sales was offset by growth in other markets, primarily in the Middle East and North East Asia, the group said.

Ericsson also pointed out that the results were driven by its momentum in 5G, while noting that the technology shift to 5G is reflected by initial margins that are "challenging."

Its shares, which rose 6% last year, are taking a bit of a battering after these comments - down 7% at 78.8 Swedish kronor in early morning trading.

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