Swedish telecom giant Ericsson posts Q3 lower sales but higher profit

Ericsson, the major Swedish telecom company, said on Tuesday that its net income in the third quarter was 3.88 billion Swedish kronor ($371.5 million), compared to last year's net loss of 30.49 billion kronor.

Earnings per share were 1.14 kronor, compared to loss per share of 9.21 kronor a year ago. Adjusted Earnings Before Interest, Taxes and Amortization (EBITA), a key earnings metric, was 7.76 billion kronor, up 64% from 4.72 billion kronor in the prior year.

Adjusted EBITA margin improved to 12.6% from last year's 7.3%, benefiting from higher gross income and cost reduction actions, partly offset by targeted investments in R&D. Sales for the quarter, meanwhile, fell 4% to 61.79 billion kronor from 64.47 billion kronor last year.

Organic sales declined 1%, with strong growth in market area North America of 55% offset by declines in most other market areas.

Looking ahead, Borje Ekholm, president and chief executive, said, "We see increasing customer momentum around programmable networks that deliver differentiated performance... We see signs that the overall market is stabilizing with North America, as an early adopter market, returning to growth... We expect our Networks sales to stabilize year-on-year during Q4, driven by continued good growth in North America. However, we anticipate further near-term sales pressure in Enterprise as we focus on profitable segments."