Ericsson has reported its first-quarter results for 2018, recording a net loss of 700 million Swedish Kronor (SEK), an 18.5 percent improvement on last year's 10 billion SEK net loss, on net sales of 43.4 billion SEK, down 9 percent year on year from 47.8 billion.
Ericsson CEO Börje Ekholm said the payoff is starting to come through as a result of the company's "focused business strategy", as well as its investments in 5G and cloud research and development (R&D) initiatives.
"A cornerstone in our strategy is to invest in R&D for both technology leadership and cost leadership, which will allow us to generate higher gross margins," the chief executive said.
"We continue to increase our R&D investments in Networks to lead in 5G. In Digital Services, we continue to increase investments into our new cloud-native portfolio as well as changing our ways of working for better R&D efficiency. In Managed Services, we continue to focus on machine intelligence, automation, and analytics to further enhance user experience, improve efficiency, and better manage the increasingly complex networks of tomorrow."
Ericsson spent 9.1 billion SEK on R&D expenses during the quarter -- after raising $370 million in December to support its 5G, mobile, and Internet of Things (IoT) R&D activities -- although overall operating expenses were down by 18.9 percent to 15.3 billion SEK due to needing to write down assets last financial year.
The Swedish networking giant brought in 28.6 billion SEK from its Networks segment; 7.7 billion SEK from Digital Services; 5.5 billion SEK from Managed Services; and 1.6 billion SEK from Emerging Business and Other, which includes its Media Solutions and Red Bee Media businesses.
Ericsson's biggest market area remains Europe and Latin America, where