Ericsson beats Q3 profit forecasts as shares rise

Ericsson reported third-quarter adjusted earnings before interest, taxes, and amortisation (EBITA) of SEK 10.1bn, surpassing the average analyst expectation of SEK 7.93bn. Total sales rose to SEK 59.5bn from SEK 56.2bn the previous year, driven primarily by growth in the Networks segment. Organic sales increased by 7% during the period.

While adjusted EBITA showed growth when excluding a SEK 7.6bn capital gain from the prior year, net income fell to SEK 5.8bn from SEK 11.3bn. The company's adjusted EBITA margin was 17.0%, compared to 28.1% in the same period last year. Ericsson also announced a structural change to merge its North East Asia and South East Asia, Oceania, and India market areas into a single unit effective January 1, 2027.

CEO Per Narvinger described the results as strong but issued a cautious outlook, citing a flat radio access network (RAN) market and ongoing geopolitical uncertainty. Chief Financial Officer Lars Sandström noted that rising component costs are expected to impact gross margins next year, though the company intends to pass these costs to customers as current contracts expire.