Ericsson has wrapped up 2024 on a high note, reporting significant growth in its North American business and a solid fourth quarter overall. However, yearly sales showed a slight decline due to challenges in certain markets and product segments. Here’s a detailed breakdown of the company’s performance.
Q4 2024 Sales Growth Driven by North America
North American Market Achieves 54% Growth
Ericsson’s North American market stood out in Q4, recording a remarkable 54% sales growth. This resurgence followed a challenging period marked by weaker demand for RAN (Radio Access Network) products. CEO Börje Ekholm noted that this growth coincided with a return to networks sales growth for the quarter.
The company also benefited from a $14 billion contract signed in 2023 to build AT&T’s Open RAN network in the United States, highlighting its strengthened position in the region.
Quarterly Sales Increase by 2%
Ericsson’s overall sales for Q4 2024 rose by 2%, reaching SEK 72.9 billion ($6.6 billion), compared to SEK 71.9 billion ($6.57 billion) in Q4 2023. The network business was a key contributor, with adjusted gross income climbing to SEK 33.7 billion ($3 billion) from SEK 29.6 billion ($2.7 billion) in the previous year.
Regional Performance: Europe and Latin America Show Growth
While North America led the way, Ericsson’s Europe and Latin America markets also posted growth during the quarter. However, these gains were offset by significant declines in other regions, particularly India, which saw a sharp drop in sales.
Yearly Performance: Decline in Network Sales Impacts Results
Annual Sales Down by 5%
Despite a strong Q4, Ericsson’s total sales for 2024 declined by 5%, falling to SEK 247.9 billion ($22.6 billion) from SEK 263.4 billion ($24 billion) in 2023. The company attributed this dip to a 6% decrease in network sales, reflecting ongoing challenges in specific markets.
Strategic Progress and Operational Excellence
Ekholm emphasized that Ericsson made significant strides in its strategic plan during 2024. Efforts to enhance supply chain efficiency and maintain commercial discipline resulted in an adjusted group gross margin of 46.3% in Q4.
“Momentum around programmable networks for differentiated performance continued to build, and customers increasingly recognize the benefits of making mobile networks accessible through APIs,” Ekholm stated. He added that while the company has not yet reached its long-term EBITA goal, progress is being made through strategic actions.
Industry Outlook: Stabilization of RAN Market
Ericsson noted signs of stabilization in the global RAN market, signaling potential opportunities for growth in the coming years. The company’s focus on programmable networks and differentiated performance is expected to drive future innovation and revenue streams.
FAQs
What were Ericsson’s total sales for Q4 2024?
Ericsson reported SEK 72.9 billion ($6.6 billion) in sales for Q4 2024, a 2% increase compared to the same period in 2023.
Which markets contributed the most to Ericsson’s growth in Q4?
North America was the primary driver, with 54% growth. Europe and Latin America also contributed, while other regions, including India, saw significant declines.
What was Ericsson’s annual performance for 2024?
The company’s annual sales declined by 5%, reaching SEK 247.9 billion ($22.6 billion) compared to SEK 263.4 billion ($24 billion) in 2023.
How did Ericsson’s network business perform in Q4?
Ericsson’s network business showed strong growth in Q4, with adjusted gross income rising to SEK 33.7 billion ($3 billion) from SEK 29.6 billion ($2.7 billion) in the previous year.
What strategic actions is Ericsson focusing on?
Ericsson is prioritizing programmable networks, commercial discipline, and supply chain efficiency to enhance performance and achieve its long-term EBITA goals.
