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Ericsson profit beats expectations on 5G demand despite China setback

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Ericsson emblem is seen at its headquarters in Stockholm, Sweden June 14, 2018. REUTERS/Olof Swahnberg

STOCKHOLM, Oct 19 (Reuters) – Sweden’s Ericsson reported third-quarter core earnings above market estimates on Tuesday, as sturdy gross sales of 5G tools in a lot of the world offset a lack of market share in mainland China.

The corporate’s quarterly adjusted working earnings rose to eight.8 billion Swedish crowns ($1.02 billion) from 8.6 billion a yr in the past, beating the imply forecast of seven.85 billion, in response to Refinitiv estimates.

Whereas each Ericsson and its rival Nokia has benefited from the ban on China’s Huawei in a number of international locations, the banning of the Chinese language firm in Sweden led to a loss contracts for the Swedish firm in China.

Ericsson will get just below 10% of its income from China.

“As a consequence of the lowered market share in mainland China, we’re planning to resize our gross sales and supply group within the nation, beginning within the fourth quarter,” Chief Govt Börje Ekholm mentioned in an announcement.

Gross sales in mainland China in Networks and Digital Companies declined 3.6 billion crowns within the quarter.

Whole income for the telecom tools maker, a rival of Huawei (HWT.UL) and Nokia , fell 2% to 56.3 billion crowns, lacking the 58.14 billion crowns seen by analysts.

($1 = 8.6258 Swedish crowns)

Reporting by Supantha Mukherjee, enhancing by Anna Ringstrom and Kim COghill

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