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Ericsson enjoyed a particularly strong fourth quarter, which buoyed its full year figures for 2018
Swedish network equipment provider Ericsson has posted a strong set of full year financials, showing the first organic growth in revenues for 5 years.
Sales revenues grew by 3 per cent in 2018, to stand at 205.4 billion Swedish Krona ($22.6 billion). Ericsson saw its strongest growth in Q4 2018, where sales revenues surged by 10 per cent on a year-on-year basis.
Ericsson was also able to significantly improve its gross profit margin, which reached 32.3 per cent at the end of 2018, up from 23.3 per cent in 2017.
"Our focused strategy has yielded clear results. Ericsson is today a stronger company. Increased investments in R&D for future growth, managed services contract reviews, combined with efficient cost control have proven to be successful, with improved competitiveness and profitability as a result. As the industry moves to 5G and IoT, we will now take the next step, focusing on profitable growth in a selective and disciplined way," said Börje Ekholm, president and CEO of Ericsson.
Ekholm said that his company’s growth in revenues was due in part to improving market conditions, but he also attributed the gains to an expansion of Ericsson’s market share in its network segment which he said was due to "a more competitive radio product portfolio".
Ericsson’s board has recommended a dividend of 1.00 Swedish Krona per share to reflect the strong performance. Ekholm said that Ericsson remained committed to investing in innovation, which would help to safeguard its profitability in the future.
"Our R&D investments over the past two years have secured a highly competitive and industry-leading offering. We will continue to invest in 5G, automation and AI to create both customer and shareholder value. Even though costs related to strategic contracts and 5G field trials will impact margins short term, they will help reaching our targets for 2020 and 2022 as well as strengthen our business in the long term," he said.
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