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Shares in Swedish telecommunications company Ericsson rose after third-quarter core profit beat analysts’ expectations and on growing demand in North America.
The company’s shares edged up nearly 9% as of 8:28 a.m. London time before falling slightly to 7% at 9:00 a.m.
Ericsson announced on Tuesday that its adjusted third-quarter profit (excluding impairment provisions) was 7.327 billion Swedish krona (about 700 million U.S. dollars), compared with 3.9 billion Swedish krona in the same period last year, exceeding the average forecast of 5.75 billion Swedish kronor by analysts quoted by Reuters .
Reuters estimated that third-quarter net sales fell 4% year-on-year to 61.8 billion Swedish krona, but still exceeded analysts’ expectations of nearly 61.6 billion kronor. North America has become a bright spot in the sales chart, growing by more than 50% compared with the same period last year.
“We see the overall market stabilizing, with North America returning to growth as an early adopter market,” Ericsson Chief Executive Börje Ekholm said in a statement. He stressed that he still expected “good growth” in the region and in the fourth quarter. Quarterly sales were “stable year-on-year.”
The company solidified its position in the U.S. last year when it beat Finnish rival Nokia to win a big contract to build a telecoms network using so-called ORAN technology, aiming to cover 70% of U.S. carrier AT&T’s traffic by the end of 2026 .
Citing new “market mix, business discipline and cost actions,” the company said its adjusted gross margin rose to 46.3% in the third quarter, compared with 39.2% in the same period last year.
The results mark a rebound for Ericsson, which has been grappling with slowing demand for 5G equipment, which prompted it in March to announce plans to cut 1,200 employees in Sweden. In order to reduce costs, the company previously cut 8,500 positions globally, equivalent to about 8% of its total workforce.
This breaking news story is being updated.
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