Ericsson beats earnings forecasts and announces Asia-Pacific merger
Shares gained as much as 11% in Stockholm after the telecom equipment supplier reported 7% organic sales growth.
Ericsson posted adjusted EBITA of SEK10.1 billion for the third quarter, beating an average analyst estimate of SEK7.93 billion compiled by Bloomberg. Alongside its results, the Swedish company announced a restructuring that will unite its two Asian market areas from 1 January 2027.
Bloomberg said the stock jumped as much as 11% in Stockholm, marking its strongest intraday rise since 23 January. Its gain for the year reached 18%.
Ericsson said reported sales increased to SEK59.5 billion from SEK56.2 billion a year earlier. Organic sales growth of 7% came mainly from Networks, with three of its four market areas recording higher sales.
The company’s adjusted EBITA was below the year-earlier SEK15.8 billion, which included a capital gain worth SEK7.6 billion. Ericsson said the measure improved when that gain was excluded. Net income declined to SEK5.8 billion from SEK11.3 billion.
The new Asia-Pacific operation will combine North East Asia with South East Asia, Oceania and India. Patrick Johansson will move from leading Europe, Middle East and Africa to oversee the combined operation. Ericsson said it would begin recruiting a new EMEA head.
Ericsson also plans to split up Enterprise Wireless Solutions. Networks will take over Neutral Host solutions and Ericsson Private 5G. Wireless WAN will continue as a standalone business under Americas head Yossi Cohen.
Chief financial officer Lars Sandström told Bloomberg that temporary product-development measures had offset rising component costs. He said customers would face those costs once existing contracts ended. Chief executive Per Narvinger told Bloomberg TV that purchases ahead of price increases accounted for some demand during the quarter.
