Ericsson Q4 core profit hit by slowdown in US business

STOCKHOLM: Swedish telecoms equipment group Ericsson reported a smaller than expected rise in fourth-quarter core earnings on Friday and said the quarter, seasonally its best, had nevertheless been hit by a slowdown in its previously surging US business and higher costs.
After a number of lean years, Ericsson has been boosted by the roll out of new, super-fast 5G networks, particularly in the United States over the last year. The new networks are expected to host critical functions from driverless vehicles to smart electric grids and military communications and the United States – as well as South Korea – has been the earliest adopter. However, sales in the high-margin US dropped during the quarter and digitalisation investments as well as costs related to the acquisition of Germany’s Kathrein rose.
“Due to the uncertainty related to an announced operator merger, we saw a slowdown in our North American business in Q4, resulting in North America having the lowest share of total sales for some time,” Chief Executive Borje Ekholm said in a statement. — Reuters