Ericsson reported third-quarter sales of SEK 55.5 billion, up 17 percent from a year earlier and 1 percent higher sequentially. Excluding currency effects, revenues rose 24 percent year-on-year, thanks to continued growth in mobile broadband equipment and strength in services sales. The core Networks division increased sales 25 percent year-on-year to SEK 32.5 billion, and Global Services revenue rose 7 percent to SEK 20.4 billion. Ericsson said the figures show it's on track to win market share over the full year. The company's gross margin dipped to 35 percent in Q3 from 39 a year ago, due to a higher proportion of coverage and upgrade projects in Europe. These lower-margin projects are expected to accelerate in the fourth quarter. Operating profit, excluding joint ventures, increased to SEK 6.3 billion from SEK 6.2 billion a year ago, despite SEK 400 million in restructuring charges. Ericsson said it still expects around SEK 3 billion in total restructuring charges this year. Ericsson's share of earnings from joint ventures was a loss of SEK 0.6 billion before tax, versus zero a year ago. Sony Ericsson contributed a small profit of SEK 100 million, while ST-Ericsson had a loss of SEK 700 million. An improvement in financing costs meant the company's net profit was still higher, at SEK 3.8 billion versus SEK 3.6 billion a year ago. Ericsson said the impact on the supply chain from the earthquake in Japan had ended. However, the uncertain economic outlook was expected to make operators cautious on spending in the short term. The company remained bullish on the long-term outlook, saying it expects global mobile broadband subscriptions to reach more than 1 billion by year-end.
