Sweden's Ericsson Q3 sales rise 6% on Networks unit strength
Overview
Sweden telecom equipment maker's Q3 net sales rose 6% yr/yr, driven by Networks segment
Adjusted EBITA and net income declined yr/yr, reflecting absence of prior-year capital gain
Company repurchased SEK 4.8 bln of shares during the quarter
Outlook
Ericsson says the RAN market is flat and geopolitical uncertainty remains elevated
Company expects component costs to be a headwind to gross margin next year
Ericsson aims to drive further efficiencies through a simplified operating structure
Result Drivers
NETWORKS SEGMENT - Co said organic sales growth was primarily driven by higher sales in Networks
PORTFOLIO OPTIMIZATION - Co said pricing and efficiency measures helped offset higher component costs and strengthen competitiveness
AI-ENABLED FEATURES - CEO said efficiency gains from AI-enabled features are being deployed in customer networks
Company press release:
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q3 Net Sales | SEK 59.48 bln | ||
Q3 EPS | SEK 1.77 | ||
Q3 Net Income | SEK 5.8 bln | ||
Q3 Gross Margin | 47.1% | ||
Q3 Adjusted EBIT | SEK 9.76 bln | ||
Q3 Adjusted Gross Margin | 47.7% | ||
Q3 EBIT | SEK 8.86 bln | ||
Q3 EBITA | SEK 9.23 bln | ||
Q3 EBITA Margin | 15.5% |
Analyst Coverage
The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 6 "strong buy" or "buy", 8 "hold" and 8 "sell" or "strong sell"
The average consensus recommendation for the communications & networking peer group is "buy."
Wall Street's median 12-month price target for Telefonaktiebolaget LM Ericsson is SEK98.00, about 0.9% above its October 14 closing price of SEK97.10
The stock recently traded at 14 times the next 12-month earnings vs. a P/E of 16 three months ago
Reuters Recommended Reads
Oct 12 - Sweden's Telia to cut around 900 jobs and save $100 million
Oct 13 - Scaleway to build AMD-powered AI supercomputer in Sweden
Oct 14 - Sweden's SEB must hold more capital, shares fall 4%
For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.
(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)