Swedish telecom giant Ericsson (ERIC, Financial) reported third-quarter earnings that exceeded analysts' expectations, bolstered by increased demand in the North American market. The company's stock saw a significant uptick following the announcement. Ericsson disclosed a third-quarter profit of 7.327 billion Swedish kronor ($700 million) after impairments, surpassing last year's 3.9 billion kronor and beating the expected 5.75 billion kronor average forecast by analysts.
Despite a year-over-year decline of 4% in net sales to 61.8 billion Swedish kronor, sales remained ahead of analysts' predictions of approximately 61.6 billion kronor. The North American market was a standout, with sales growth exceeding 50%, contributing positively to the sales outlook. CEO Börje Ekholm noted signs of market stabilization and described North America as an early adopter market recovering growth. He anticipates "good growth" in the region, with network sales stabilizing year-over-year in the fourth quarter.
Ericsson’s stock on the Nasdaq Stockholm exchange initially rose nearly 9%, later narrowing to a 7% gain. Similarly, the stock rose almost 7% in pre-market trading in the U.S. Prior challenges included a slowdown in demand for 5G equipment, leading to an announcement in March about plans to cut 1,200 jobs in Sweden. As a cost-cutting measure, Ericsson previously reduced approximately 8,500 positions globally, affecting around 8% of its workforce.
