Ericsson cuts operations in China due to Huawei
Ericsson cuts operations in China due to Huawei

While Sweden has banned China's Huawei from selling 5G devices in the country, Sweden's Ericsson has announced plans to reduce its activities in China after a sharp drop in sales in one of its largest markets.

When the news broke, the company announced that third-quarter core earnings were better than expected due to strong sales of 5G devices in most parts of the world, offsetting lost market share due to China and global supply chain issues.

Sweden banned China's Huawei from selling 5G devices in the country a year ago, and Ericsson lost most of its shares in the latest round of China telecom bidding.

The company's chief financial officer said 11% of Ericsson's total sales from China fell to about 3%, which offset the company's profit while filling Huawei's gaps in several areas. Under pressure from the government retreats. America.

The decline started in the second quarter and there was an annual loss during the same period next year. In the third quarter alone, sales in China fell by 3.6 billion Swedish kronor (41,814 million US dollars).

The company is now planning to cut sales in the country. The layoffs in China are a minor setback for the company, which has been operating in China for more than 100 years. The CEO last month promised to redouble efforts to regain market share in China.

Ericsson loses in China because of Huawei

Nokia rival Ericsson said global supply chain problems were emerging. At the end of the third quarter, the company judged that the disruption in the supply chain had had some impact on sales and that these issues remained at risk.

Due to a lack of chips from suppliers and logistical problems, the company was unable to deliver some devices to customers. This leads to less income.

Quarterly operating profit increased from SEK 8.6 billion ($1.02 billion) the previous year to SEK 8.8 billion ($1.02 billion). The average forecast of 7.85 billion was exceeded.

Receiving 5G contracts from the three US operators helped the company absorb losses in China. Total turnover fell 2% to 56.3 billion crowns, lower than the 58.14 billion crowns that analysts had expected.

Previous Post Next Post