Ericsson beats Q3 estimates but warns on costs and reshapes enterprise wireless

Ericsson posted 7% organic sales growth in the third quarter and beat adjusted EBITA expectations by 28%, while cautioning that higher AI-related component costs and price increases will pressure gross margins through 2027. The vendor is moving its enterprise wireless business back into its networks unit to improve R&D coordination and growth, and will form a new Asia Pacific sales region in January. It also said some future R&D will connect with satellite networks such as Starlink for indoor enterprise use, as the RAN market remains flat.

"Reported revenue rose to SEK 59.5 billion from SEK 56.2 billion, while adjusted EBITA fell to SEK 10.1 billion from SEK 15.8 billion; the prior year included a SEK 7.6 billion capital gain. Adjusted gross margin slipped to 47.7% from 48.1%, and net income dropped to SEK 5.8 billion from SEK 11.3 billion."

Count: Reported1 revenue2 rose3 to4 SEK5 59.5(6) billion7 from8 SEK9 56.2(10) billion11 while12 adjusted13 EBITA14 fell15 to16 SEK17 10.1(18) billion19 from20 SEK21 15.8(22) billion23; the24 prior25 year26 included27 a28 SEK29 7.6(30) billion31 capital32 gain33. Adjusted34 gross35 margin36 slipped37 to38 47.7%39 from40 48.1%41 and42 net43 income44 dropped45 to46 SEK47 5.8(48) billion49 from50 SEK51 11.3(52) billion53. 53.

Second:

"Some buyers ordered before price rises, and Ericsson plans to pass on higher costs. Enterprise wireless is returning to networks, and a January APAC sales unit will combine North East Asia, South East Asia, Oceania, and India. Patrick Johansson will lead it; Åsa Tamsons will aid integration through year-end. Future indoor enterprise R&D may link with satellite networks such as Starlink."

Count: Some1 buyers2 ordered3 before4 price5 rises6 and7 Ericsson8 plans9 to10 pass11 on12 higher13 costs14. Enterprise15 wireless16 is17 returning18 to19 networks20 and21 a22 January23 APAC24 sales25 unit26 will27 combine28 North29 East30 Asia31 South32 East33 Asia34 Oceania35 and36 India37. Patrick38 Johansson39 will40 lead41 it42; Åsa43 Tamsons44 will45 aid4