Sweden's Ericsson Q3 sales rise 6% on Networks unit strength

By Reuters News


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.)

Capital.com is an execution-only brokerage platform and the content provided on the Capital.com website is intended for informational purposes only and should not be regarded as an offer to sell or a solicitation of an offer to buy the products or securities to which it applies. No representation or warranty is given as to the accuracy or completeness of the information provided.

The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance.

To the extent permitted by law, in no event shall Capital.com (or any affiliate or employee) have any liability for any loss arising from the use of the information provided. Any person acting on the information does so entirely at their own risk.

Any information which could be construed as “investment research” has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication.