Ericsson said Tuesday it returned to profit in the third quarter as a big contract with US carrier AT&T gave the Swedish telecommunications equipment giant a boost.

Ericsson posted a net profit of 3.9 billion Swedish kronor ($374 million) in the quarter after a heavy loss of 30.5 billion kronor over the same period last year.

Last year’s loss was due to a write-down on the value of its purchase of US cloud-based communications operator Vonage.

Ericsson reported “strong growth” in its North American market, where it beat out Finnish rival Nokia for a $14 billion five-year contract with AT&T in December.

The group posted overall sales of 61.8 billion kronor in the third quarter, down four per cent from last year.

Both profit and sales were slightly higher than forecast by analysts surveyed by Bloomberg.

Ericsson and Nokia are cutting costs and jobs as demand for 5G equipment has slowed.

“Q3 marks a period of laser-focus on the execution of our strategic plan,” chief executive Borje Ekholm said in a statement.

“Our Q3 results demonstrate our progress, with strong gross margin expansion and free cash flow, benefiting from our commercial discipline and operational efficiency actions,” he added.

AFP