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Ericsson Stock Up On Narrower Loss, Higher Sales In Q4

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Shares of Ericsson (ERIC) were gaining around 3 percent in the early morning trading in Stockholm after the Swedish networking and telecom giant reported sharply narrower net loss in its fourth quarter with increased net sales.

Looking ahead, Börje Ekholm, President and CEO, said, "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."

In November last year, the company had said that it expects net sales of 210 billion kronor - 220 billion kronor by 2020, mainly driven by Networks.

For the fourth quarter, net loss narrowed to 6.5 billion Swedish kronor from loss of 18.5 billion kronor last year. Loss per share was 1.99 kronor compared to loss 5.63 kronor in the prior year.

Non-IFRS loss per share was 0.77 krona compared to a loss 1.09 kronor in the previous year.

In the preceding third quarter, the company had reported a net profit of 2.7 billion kronor or 0.83 krona per share, and adjusted profit of 1.03 kronor per share.

Net sales for the fourth quarter grew 10% to 63.8 billion kronor from 57.9 billion kronor last year. Sales adjusted for comparable units and currency increased 4%. Sequentially, sales climbed 19 percent.

Sales adjusted for comparable units and currency in Networks division grew 6% and in Digital Services division increased 5%.

Gross margin was 25.7%, higher than last year's 21.6%. Adjusted gross margin improved to 36.3% from 25.1 percent a year earlier.

Operating loss narrowed to 1.9 billion kronor from loss of 19.3 billion kronor a year ago. Operating margin was negative 2.9%, compared to prior year's negative 33.3%.

In the year 2018, net loss narrowed to 6.3 billion kronor, and net sales grew 3 percent to 210.8 billion kronor. The company noted that sales have gradually improved during 2018, resulting in full-year organic sales growth for the first time since 2013.

Further, the company said its Board of Directors will propose a dividend for 2018 of 1.00 kronor per share to the AGM.

In Sweden, Ericsson shares were trading at 80.94 kronor, up 3%.

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