ERICSSON earnings beat analysts’ expectations in the third quarter, as the Swedish telecom equipment returned to growth in the US.
Adjusted earnings before interest and taxes were 7.3 billion kronor (S$917 million), the Stockholm-based company said on Tuesday (Oct 15). That compared to an average of 5.6 billion kronor forecast by analysts surveyed by Bloomberg. Adjusted operating margin was 11.9 per cent, compared to an average estimate of 8.5 per cent.
“We see signs that the overall market is stabilising with North America, as an early adopter market, returning to growth,” chief executive officer Borje Ekholm said. “While the market development is ultimately in the hands of our customers, we are working to deliver operational excellence regardless of market conditions.”
Ericsson has weathered a difficult telecom equipment market for the past several quarters as operators scaled back or delayed their network investments. The company responded with aggressive cost-cutting measures, including slashing thousands of jobs, which, along with securing a US$14 billion contract with AT&T last December, has won investor confidence. Shares have risen 24 per cent this year to Monday.
Ericsson previously said that the AT&T contract to roll out OpenRAN, a technology that gives operators the flexibility to choose the vendors that supply its antennas and infrastructure, would boost revenue during the second half of this year.
Still, demand for equipment from some major markets has declined. India, which had one of the fastest 5G rollouts in 2022, has slowed spending while many US operators have stockpiles of equipment. Spending by telecom operators fell 10 per cent in the first half of 2024 from a year earlier, and is seen continuing to decline for the rest of the year, according to Dell’Oro Group, which tracks the industry.
Ericsson’s Nordic rival, Nokia Oyj, reports its third-quarter earnings on Thursday. BLOOMBERG
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Publish date : 2024-10-14 19:13:00
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