SOURCE: REUTERS
By Gianluca Lo Nostro and Agnieszka Olenska
Oct 14 (Reuters) – Shares in Ericsson ERICb.ST surged more than 13% on Tuesday after the Swedish telecoms equipment maker exceeded expectations for quarterly earnings growth and played down the impact of U.S. tariffs.
Adjusted earnings before interest and taxes (EBIT) excluding restructuring charges were 15.4 billion Swedish crowns ($1.62 billion) in the quarter through September. That was 9.2% higher than the 14.1 billion crowns forecast in an Infront consensus poll of analysts provided by the company.
Cost savings and a dominant position in North America have helped Ericsson stay ahead of Nordic rival Nokia NOKIA.HE in the 5G race, but revenue weakness and tariffs have overshadowed its expected performance ahead.
OUTPERFORMS RIVALS, NO TARIFF IMPACT EXPECTED AHEAD
The Swedish group has outperformed rivals in winning U.S. contracts, mainly a $14 billion deal with AT&T, making it the world’s second-biggest vendor in the radio access network market after China’s Huawei, according to research firm Dell’Oro.
“No company is immune to tariffs. So we will see what happens there and what decisions are coming. But what we see so far is no more impact going forward,” Ericsson’s finance chief Lars Sandström said in a Reuters interview.
Shares jumped more than 13% in morning trading, and were on track for their largest single-day gain since April 2018.
Third-quarter net sales were 9% down from a year ago at 56.2 billion crowns but beat analyst expectation of 55.7 billion.
AMERICAS SALES SLOW AFTER STRONG QUARTER LAST YEAR
However, sales in Americas slowed by 8% from 2024, when there was a robust quarter due to previous deliveries and network investments by large customers.
It also announced a five-year partnership with Vodafone VOD.L to modernize programmable networks but didn’t disclose details.
In August, Ericsson completed the sale of its Iconectiv business, yielding a one-off profit gain of about 7.6 billion Swedish crowns and offering it scope for higher dividends and or a share buyback program.—Reuters
