Ericsson Watches grew 21% in sales in the third quarter, supported by a growing presence in mobile networks; Margins shrink due to footprint expansion – Telefonaktiebolaget LM (NASDAQ:ERIC)

  • Telefonaktiebolaget LM Ericsson Eric Sales for the third quarter of fiscal 22 posted growth of 21% year-on-year to SEK 68 billion.
  • Group organic sales grew 3% year-over-year, driven by networks in North America. Network organic sales were up 7% year-over-year.
  • It reported earnings per share of SEK 1.56 versus SEK 1.73 last year.
  • Adjusted gross margin contracted 260 basis points to 41.4% due to lower IPR revenue, supply chain costs and a larger share of services after footprint expansion in networks.
  • Adjusted EBIT margin fell 510 basis points to 10.6%, dragged down by increased investments in technology.
  • CEO Börje Ekholm said: “We see strong underlying performance and strong business momentum as we continue to implement our strategy. This includes leading in mobile networks by increasing our market share. Since 2017, we have increased our RAN market share, excluding mainland China, 33% to 39%, and we delivered multiple contract wins across geographies in the quarter We continue to solidify our strong 5G position to capture the significant opportunities offered by the faster mobile generation Enterprise space Growth is gaining momentum with the acquisition of Vonage, providing us Access to a powerful suite of cloud communications services.
  • price action: Shares of Eric were trading down 14.98% at $5.45 in the pre-market session on Thursday’s last check.