STOCKHOLM: Ericsson on Tuesday reported a fall in fourth quarter operating profit but beat expectations as the telecom equipment supplier increased its margin in a market where demand for 5G gear is growing slowly.

Operating profit (EBIT) excluding restructuring charges for the October-December period fell to 7.37 billion Swedish crowns ($706.99 million) from 8.08 billion crowns a year earlier, while analysts in an LSEG poll had expected 6.92 billion.

Telecom suppliers are expecting a challenging 2024 as 5G equipment sales - a key source of revenue - are slowing down in the key North American market, while India, a key growth market, may also see a slowdown.

Net sales fell 16% to 71.9 billion crowns, missing estimates of 76.64 billion.

Ericsson quarterly earnings miss expectations

“As we look to 2024, we expect the market outside China to further decline, with similar uncertainties as experienced in 2023,” said the company’s Chief Executive Borje Ekholm in a statement.

However, its EBIT margin excluding restructuring charges rose to 10.3% from 9.4%.

The company also appointed Lars Sandstrom as its new chief financial officer, replacing long-time company veteran Carl Mellander.