By Dominic Chopping

STOCKHOLM--Ericsson sees further signs that the overall network market is stabilizing, as customer spending continues to accelerate in North America.

The Swedish telecommunications-equipment company said Friday that its key networks unit saw a 70% jump in North America sales in the fourth quarter thanks to some contract wins and increased network investments by some large customers.

Sales in Southeast Asia, Oceania and India decreased materially though, leaving overall network sales growth in the quarter at 4%.

Network vendors such as Ericsson have been waiting for telecom operators in North America to increase their spending after they completed their first phase of 5G network rollouts before other markets and as they worked through stockpiled inventory. Sales in the region rebounded sharply in the third quarter and continued to do so in the fourth quarter.

India has also largely completed a rapid phase of network upgrades that saw deployments peak in 2023, and operator investments in the country have now normalized, Ericsson said.

The company reported an adjusted gross margin in the networks unit of 49.1%, above guidance of 47% to 49%, aided by an improved market mix, with more work coming from higher-margin countries. Improved supply-chain efficiencies and new patent licensing deals also helped.

Net profit attributable to shareholders in the quarter rose to 4.78 billion Swedish kronor ($434.1 million) from 3.39 billion kronor a year earlier, below the 7.05 billion kronor expected in a FactSet analyst poll.

Sales rose 1.4% to 72.91 billion kronor, in line with FactSet estimates.

The company reported higher operating costs in the quarter and said restructuring charges rose to 1.6 billion kronor, mainly related to redundancies, including actions to right-size operations to align with a lower level of customer demand in some markets as well as actions to improve efficiency and reduce certain activities.

Restructuring charges for 2025 are expected to remain at elevated levels, it said.

Ericsson expects to report a networks adjusted gross margin of between 47% and 49% in the first quarter, while network sales are expected to grow broadly in line with what is usual for the time of year, it said.

The company proposed a full-year dividend of 2.85 kronor, up from 2.70 kronor in 2023.

Write to Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

January 24, 2025 01:56 ET (06:56 GMT)

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