As the coronavirus slams the brakes on industries globally, telecom is one of the few industries that has seen a surge in demand with more people working remotely, benefiting companies such as Ericsson.
"There is near-term uncertainty around sales volumes due to Covid-19 and the macroeconomic situation, but with current visibility we have no reason to change our financial targets for 2020 and 2022," Chief Executive Borje Ekholm said in a statement.
Spending in the U.S. will likely be stronger this year as a combined Sprint/T-Mobile boosts up spending to use its mid-band spectrum while bigger rivals AT&T and Verizon invest in building their own 5G network.
Despite the regional shutdowns and economic uncertainty linked to the pandemic, 5G capital expenditure was a resilient investment area and telecom workers are generally viewed as essential, BofA analysts wrote in a research note.
The company's first-quarter adjusted quarterly operating earnings rose to 4.6 billion Swedish crowns (370.11 million pounds) from a year earlier, beating the mean forecast of 4.13 billion crowns, according to a Refinitiv poll of analysts.
Total revenue for the telecom equipment maker, a rival of China's Huawei Technologies Co Ltd [HWT.UL] and Finland's Nokia, rose 2% to 49.8 billion crowns but fell short of the 52.09 billion seen by analysts.
Gross margin increased to 39.8% in quarter from 38.4% in the year-earlier quarter. Ekholm said gross margin in its Networks business rose to 44.6% reflecting the strong business fundamentals with high activity across multiple regions.
(Reporting by Supantha Mukherjee in Bengaluru and Helena Soderpalm in Stockholm; editing by Niklas Pollard)
