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The company’s quarterly adjusted operating earnings excluding restructuring charges fell to 9.3 billion Swedish crowns ($902 million) from 12.8 billion crowns a year earlier. Analysts’ mean forecast for core earnings was 11.22 billion, according to Refinitiv data.
Net sales rose 21% to 86 billion crowns, beating estimates of 84.2 billion.
A settlement of a patent deal with Apple (NASDAQ:AAPL) last month resulted in revenue of 6 billion crowns, but Ericsson also took 4 billion crowns in charges, including a provision for a potential fine from the U.S. regulators and divestments.
Ericsson said it expects significant patent revenue growth over the coming 18-24 months.
While U.S. and other markets are slowing down, Ericsson is hoping newer markets such as India would help it balance some of the lower demand for 5G equipment.
“The growth from share gains in several markets could not fully compensate for reduced operator capex and inventory reductions in other markets, including North America,” Chief Executive Borje Ekholm said in a statement.
Gross margin decreased to 41.4% from 43.2% primarily due to business mix change in its Networks business.
($1 = 10.3095 Swedish crowns)
