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6/8, 8:53 AM (Source: TeleTrader)
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Ericsson wins three 5G contracts in China

Swedish multinational networking and telecommunications company Ericsson won contracts on Monday for 5G in China. However, the company said it expects the margins during the second quarter of 2020 to be negative due to high costs for new products.

Regarding the Q1 2020 earnings, Ericsson said that an increasing share of strategic contracts "was expected to weigh negatively on profitability in the second quarter 2020 primarily driven by a temporary negative gross margin in China."

According to the official announcement, the deployment of 5G in China will "continue to be dilutive to Segment Networks gross margin short-term, it is expected to contribute positively to gross and operating income from the second half of 2020 and in line with the business plan be profitable over time."

Breaking the News / TF