STOCKHOLM, Oct 15 (Reuters) – Telecom gear maker Ericsson on Thursday reported a smaller-than-expected drop in third-quarter core profit as efficiency measures helped offset higher component costs, but warned that such costs would affect margins next year. • Operating profit before amortisation and restructuring costs was 10.1 billion crowns ($1.01 billion) against a year-earlier 15.8 […]
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Ericsson braces for component cost hit after third-quarter profit beat
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STOCKHOLM, Oct 15 (Reuters) – Telecom gear maker Ericsson on Thursday reported a smaller-than-expected drop in third-quarter core profit as efficiency measures helped offset higher component costs, but warned that such costs would affect margins next year.
• Operating profit before amortisation and restructuring costs was 10.1 billion crowns ($1.01 billion) against a year-earlier 15.8 billion and a mean forecast of 7.87 billion in a poll of analysts provided by Ericsson
• The Swedish group said component costs rose in the quarter
• “Looking ahead, the RAN (Radio Access Network) market is flat, geopolitical uncertainty remains elevated and component costs are a headwind to gross margin,” new CEO Per Narvinger said in a statement
• Ericsson in July warned it was under pressure from rising memory chip costs due to surging AI demand
• Adjusted EBITA margin narrowed to 17.0% from 28.1% against a forecast 14.2%
• Organic sales rose 7% to 59.5 billion crowns, beating a forecast 55.4 billion and Ericsson said sales in North America increased slightly supported by project phasing
(Reporting by Anna Ringstrom, editing by Terje Solsvik)