Ericsson reported revenue of SEK 48.9 billion (+7 percent) in the first quarter of 2018 driven by strong growth in North America.
Ericsson generated first quarter revenue of SEK 33.5 billion from Networks, SEK 7.8 billion from Digital Services, SEK 5.9 billion from Managed Services Emerging and SEK 1.8 billion from Emerging Business and Others.
Ericsson achieved gross margin of 38.4 percent (34.2 percent) — driven by improvements in Networks and Managed Services.
India contributes 4 percent of the total revenue to Ericsson in Q1 2019 as compared with 6 percent in Q1 2018.
China contributed 5 percent of the total revenue in Q1 2019 against 4 percent in Q1 2018.
Sales contribution from North America increased to 35 percent from 27 percent of the total revenue.
Ericsson’s operating income was SEK 4.9 billion (–0.3 billion) with operating margin of 10 percent (–0.7 percent). Ericsson reported net income of SEK 2.4 billion (–0.7 billion).
Ericsson CEO Borje Ekholm said: “Our strategy, to work with lead mobile operator customers in lead markets, is generating both 5G business.”
Ericsson announced 5G network contracts with 18 operators — well behind Huawei that announced 45 deals and Nokia that signed 20 5G network contracts.
Ericsson’s Networks business achieved growth of 10 percent driven by increased investments in North America. Networks gross margin improved to 43.2 percent from 40.4 percent, mainly due to higher hardware capacity sales and IPR revenues.
Managed Services sales fell 5 percent due to headwind from contract exits. Gross margin improved to 17.7 percent from 9.1 percent, supported by efficiency gains and customer contract reviews.
Sales in Digital Services were stable due to business momentum for the new portfolio of 5G-ready and cloud-native products.