Ericsson Net Profit Beats Despite China Sales Drop and Supply-Chain Issues
October 19 2021 - 2:16AM
Dow Jones News
By Dominic Chopping
STOCKHOLM--Ericsson AB on Tuesday posted a third-quarter net
profit that beat expectations, as strong sales of 5G equipment in
North America, Europe and Latin America helped offset a hefty sales
decline in mainland China.
The telecommunications-equipment company reported second-quarter
net profit attributable to shareholders of 5.75 billion kronor
($665 million) compared with SEK5.35 billion for the year-earlier
period.
Sales slipped 2.1% to SEK56.26 billion after the heavy sales
fall in mainland China as well as some supply-chain disturbances
late in the third quarter which will continue to pose a risk, it
said.
Analysts polled by FactSet had expected net profit of SEK4.86
billion on sales of SEK58.3 billion.
Ericsson previously warned that Sweden's ban on using certain
Chinese gear in the country could see the company face retaliation,
and it said Tuesday that mainland China sales within networks and
digital services fell by SEK3.6 billion on the year.
"As a consequence of the reduced market share in mainland China
we are planning to resize our sales and delivery organization in
the country, starting in the 4Q, adding to our restructuring
charges," Chief Executive Borje Ekholm said.
Overall sales of network equipment fell 3% on the year.
Write to Dominic Chopping at dominic.chopping@wsj.com
(END) Dow Jones Newswires
October 19, 2021 02:01 ET (06:01 GMT)
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