Ericsson's Strong Networks Sales and Cost Measures Drive Third-Quarter Beat

Dow Jones10-15

0658 GMT - Ericsson's results were much better than expected, driven by a significant beat in networks sales, J.P. Morgan analysts write. The sales beat was driven by commercial wins in Japan and India, possible prebuying by customers ahead of price increases and a new licensing deal, the bank says. Even excluding the impact of the licensing deal, the Swedish telecommunications equipment maker beat earnings by around 22% due to the higher revenue and cost optimization and restructuring measures, it adds. "The results show strong execution from the company in a difficult market." However, Ericsson expects a flat radio access network and component cost headwinds into 2027. Key questions for the analyst call will be how many contracts have been renegotiated and if investors should expect price increases and reconfigurations to help offset the negative impacts.

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