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Ericsson posts better-than-expected results, shares rally

Shares in Ericsson rallied on Tuesday, after the Swedish telecoms equipment manufacturer posted above-forecast quarterly numbers.

Ericsson

Source: Sharecast

Third-quarter sales came in at Swedish krone 56.2bn (£4.5bn), down 9% year-on-year and by 2% on an organic basis quarter-on-quarter.

The figure was, however, better than the SEK55.7bn expected by analysts.

Also ahead of forecasts were adjusted earnings before interest and tax, which at SEK15.4bn comfortably beat consensus for SEK14.1bn.

The group adjusted gross margin was 48.1%, supported in particular by a 50% margin in its networks unit.

As at 1115 GMT, shares in Ericsson had surged 15%.

Borje Ekholm, chief executive, said: "In the third quarter we established margins at a new, long-term level following strong operational execution over the past few years.

"Looking ahead, we expect enterprise organic sales to stabilise in the fourth quarter, and the RAN market to remain broadly stable. Solid recurring cash flow and the Iconectiv sale contributed to a strong cash position, offering scope for increase shareholder distributions."

Ericsson sold its US Iconectiv business in August, resulting in a one-off profit gain of around SEK7.6bn.

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