Ericsson reported third-quarter sales up 9 percent year-on-year to SEK 57.6 billion. Sales for comparable units, adjusted for currency effects, grew by 3 percent annually and 2 percent quarterly. The growth was mainly driven by the Middle East, China, India and Russia, and was partly offset by a sales decline in North America. The company's gross margin increased to 35.2 percent from 32.0 a year ago, driven by an improved business mix, higher IPR revenues and lower restructuring charges.
Operating profit still fell to SEK 3.9 billion from SEK 4.2 billion in the year-earlier period, due to a revaluation of unrealized hedge contracts of SEK 1.0 billion. Ericsson said it also faced higher operating expenses for the restructuring of the modems business and the acquired Mediaroom business as well as a planned ramp up of investments in IP. Net profit fell 13 percent to SEK 2.6 billion, and operating cash flow was a negative SEK 1.4 billion.
Ericsson said it was benefiting from mobile broadband contracts in Greater China, improving conditions in Japan and India and a return to growth in parts of Europe. Sales slowed in North America as operators there focused more on cash flow optimisation.
