Ericsson raises 2020 sales target as recovery gains pace

Ericsson on Thursday raised its sales target for 2020, driven mainly by a recovery in its hard-hit networks business and cost-savings gains. The mobile telecom equipment maker now aims for net sales of 210-220 billion Swedish crowns ($23.3-24.4 billion), up from earlier guidance of 190-200 billion.

After years of crisis, the Swedish firm has seen a tentative recovery this year, leaving several analysts expecting an upgrade to its sales forecast at its capital markets day. Ericsson, whose pummeled stock has risen 50 percent this year as its restructuring begins to pay off, is due to hold presentations for investors and analysts in New York on Thursday.

"With our focused strategy we have created a strong foundation of stability and profitability," CEO Borje Ekholm said in a statement. "As the industry moves to 5G and IoT we are now preparing to take the next step to generate profitable growth in a selective and disciplined way."

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Ericsson kept its 2020 operating margin target, excluding restructuring, of more than 10 percent, adding its long-term target of at least 12 percent would be reached no later than 2022. Analysts on average expect a reported operating margin of 10.3 percent in 2020 on sales of 209 billion crowns, according to Refinitiv data.