Ericsson Results a Clear Beat, Guidance Also Better than Expected

Dow Jones10-15 14:51

0651 GMT - Ericsson's third-quarter results have clearly exceeded expectations and fourth-quarter guidance is also better than consensus, Inderes analyst Atte Riikola writes. Revenue grew 6% to 59.5 billion Swedish kronor, beating the 55.4 billion kronor consensus estimate. Adjusted Ebita rose to 9.0 billion kronor versus the expected 6.8 billion kronor, resulting in a margin of 23.1% versus the expected 19.5%. Riikola says fourth-quarter networks guidance translates into revenue of around 45 billion kronor, versus consensus at 43.4 billion kronor. The networks adjusted gross margin is expected to be in the range of 49%-51% in the fourth quarter, compared with consensus at 48.4%. Ericsson highlighted that component costs are a headwind to gross margins next year, but it is seeking to offset the impact through portfolio optimization, pricing and efficiency measures.

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