Yahoo Finance Telefonaktiebolaget LM Ericsson (publ) (NASDAQ:ERIC) Q1 2024 Earnings Call Transcript
Telefonaktiebolaget LM Ericsson (publ) (NASDAQ:ERIC) Q1 2024 Earnings Call Transcript April 16, 2024
Telefonaktiebolaget LM Ericsson (publ) isn't one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Daniel Morris: Hello, everyone, and welcome to today's presentation of Ericsson's First Quarter 2024 Results. With me today are Borje Ekholm, our President and CEO; and Lars Sandstrom, Chief Financial Officer. As usual, we'll have a short presentation followed by Q&A. And in order to ask a question, you'll need to join the conference by phone. Details can be found in today's earnings release and on the Investor Relations website. Please be advised that today's call is being recorded, and I also need to advise you that today's presentation may include forward-looking statements. These statements are based on our current expectations and certain planning assumptions, which are subject to risks and uncertainties. The actual results may differ materially due to factors mentioned in today's press release and discussed in this conference call.
We encourage you to read about these risks and uncertainties in our earnings report as well as in our annual report. I'll now hand the call over to Borje and to Lars for their introductory comments.
Borje Ekholm: Thanks, Daniel, and good morning, everyone. So let me first start off by welcoming my two new colleagues, Lars Sandstrom, our new CFO; as well as Daniel Morris, our new Head of IR. So it's great to have both of you joining the call and being on Board at Ericsson, so a big welcome. So first, I will cover some key highlights from the quarter before Lars goes through the financials in much greater detail. So during Q1, we continue to execute on our strategy to strengthen our leadership in the mobile networks and drive a focused expansion into enterprise, while of course, continuing to strengthen our culture and operational execution. As expected, our customers remain cautious with their investments and our organic sales decline and with India slowing following the rapid and unprecedented 5G buildout last year.
We continue to view the level of industry investments that's unsustainably low, but we can't in reality impact this in the short term. Though what we work on is what we can control, and that's like the commercial and operational discipline, and of course having a competitive solutions and product portfolio. So despite the market headwinds and difficult market conditions, we maintained our market leading position and delivered a good improvement in gross margin to 42.7%, excluding restructuring charges. For the rest of the year, we expect the mobile networks market to remain weak. External sources estimate that the global RAN market will decline by minus 4%. That looks a bit optimistic to me. However, we see the potential for sales to start to stabilize on a year-over-year basis during the second half.
And then reason for that is, of course, that North America investments are expected to grow for the full-year 2024 and in the second part of the year, we should start to see the benefit from this. But we will, of course, also see the benefit from the recent contract win we had that we announced in the end of last year. We continue to be disciplined in our execution, including proactively taking cost savings measures to ensure that we're well positioned to maximize shareholder value when the market ultimately improves. We're still in the early phases of the build out of 5G, but the improvement in the market will ultimately be in the hands of our customers, and that will happen when traffic grows and new use cases can be launched. So in the meantime, we remain fully focused to manage what's in our control, but at the same time, making the critical investment that reinforces our long-term competitive positioning.
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