Ericsson reported better-than-expected third-quarter profits as efficiency measures helped cushion rising component costs, but the Swedish telecom equipment maker warned that higher expenses could weigh on margins next year.
The company’s operating profit before amortisation and restructuring costs reached 10.1 billion Swedish kronor ($1.01 billion), down from 15.8 billion kronor a year earlier but above analysts’ average forecast of 7.87 billion kronor.
Organic sales increased 7% to 59.5 billion kronor, surpassing market expectations of 55.4 billion kronor. Ericsson also reported a narrower-than-expected decline in its adjusted EBITA margin, which fell to 17% from 28.1% a year earlier.
Chief Executive Per Narvinger said the radio access network (RAN) market remained flat, while geopolitical uncertainty and rising component costs continued to pressure profitability. The company had previously warned that growing artificial intelligence demand was driving up memory chip costs.
Despite the stronger-than-expected results, Ericsson faces continued pressure to manage expenses while maintaining profitability. Slightly higher sales in North America, supported by project timing, provided some positive momentum as the company navigates uncertain market conditions.
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