Modest quarterly and annual sales have translated into strong profits in both the fourth quarter and 2020 calendar year for communications technology provider Ericsson, with network sales and 5G making healthy contributions.
For the fourth quarter of the year, sales adjusted for comparable units and currency were SEK69.6bn (£6bn) growing by 13% on an annual basis, driven by sales in Northeast Asia, Europe and North America. Gross margin excluding restructuring charges inched up just over three percentage points from 37.1% to 40.6%, with margin improvements in all segments. Operating income excluding restructuring charges improved annually by 80% to SEK11bn, while reported net income was SEK7.2bn.
For the full year, sales grew by 2% annually to SEK232.4bn, with reported operating income almost trebling in a year to SEK27.8bn. Reported net income was SEK17.6bn, growing significantly from the SEK1.8bn reported at the end of 2019.
Looking at highlights for the year, Ericsson noted that network sales grew organically by 20%, reporting a gross margin of 43.5% for the fourth quarter. It said this reflected continued high activity levels in North America and Northeast Asia, and also in Europe where it further increased market share.
The gross margin at the digital services division