By Dominic Chopping

 

STOCKHOLM--Ericsson AB on Tuesday posted a fourth-quarter net profit that beat expectations, as strong sales of 5G equipment in North America, Europe and Latin America helped offset a hefty sales decline in mainland China.

The telecommunications-equipment company reported net profit attributable to shareholders of 10.08 billion kronor ($962.4 million), compared with SEK7.52 billion a year earlier.

Sales rose 2.5% to SEK71.33 billion despite the heavy sales fall in mainland China and a drop in patent royalties as intellectual-property income was weighed on by an expired licensing contract, the company said.

Analysts polled by FactSet had expected net profit of SEK6.5 billion on sales of SEK67.77 billion.

Mainland China sales within networks fell by SEK1.5 billion on year, though overall sales of network equipment grew organically by 3%, the company said.

"We expect fundamentals to remain strong in our core mobile infrastructure business during 2022," Chief Executive Borje Ekholm said.

Ericsson said the group earnings before interest and taxes target for 2022 of 12% to 14% remains, though its key focus is now to accelerate toward reaching its long-term Ebita margin target of 15% to 18% no later than in two to three years.

Ericsson proposed a 2021 dividend of SEK2.50, from SEK2.00.

 

Write to Dominic Chopping at dominic.chopping@wsj.com

 

(END) Dow Jones Newswires

January 25, 2022 01:51 ET (06:51 GMT)

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