Ericsson reported third-quarter sales of SEK 49.2 billion, up 13 percent from a year earlier. The network equipment maker said sales improved in all regions apart from Western Europe, which fell 6 percent. Ericsson posted a gross margin of 37.0 percent, up from 35.6 percent a year ago and stable versus Q2. The year-over-year improvement reflects a better business mix outside Western Europe and improved margins in Professional Services, Ericsson said. Operating income, excluding restructuring charges for the company's ongoing cost reductions, amounted to SEK 5.7 billion, up slightly from SEK 5.6 billion last year. Net profit tumbled 28 percent to SEK 2.8 billion, hurt by the restructuring costs and lower results at the handset venture Sony Ericsson. Restructuring charges reached SEK 2.0 billion in the quarter, and SEK 4.6 billion to date. Ericsson said the cost reductions will be extended in the fourth quarter, although at a slower pace, and the savings will exceed earlier projections of SEK 4 billion annually. The company said it had seen little impact from the financial crisis yet, as customers are generally well-financed and networks remain loaded to capacity. However, the company was cautious on the outlook, saying it's preparing for a "flattish" mobile infrastructure market in 2009 and possibly more difficult conditions. The services market is expected to continue to grow, and Ericssom remains positive on the industry's long-term outlook.
