Ericsson Clocks 2% Revenue Decline In Q3, Margins Remain Stable

  • Telefonaktiebolaget L M Ericsson ERIC reported a third-quarter FY21 revenue decline of 2% year-on-year to SEK56.3 billion. Group organic sales declined by 1% Y/Y.
  • Excluding sales in Mainland China, sales in Networks rose 8% Y/Y, and Digital Services sales grew 6% Y/Y.
  • It reported an EPS of SEK1.73 versus SEK1.61 last year.
  • The adjusted gross margin expanded 80 basis points to 44%, driven by operational leverage in Networks. The adjusted EBIT margin remained stable at 15.7%.
  • "We continue to win footprint across our business by leveraging our competitive 5G portfolio," said CEO Börje Ekholm.
  • "However, late in Q3 we saw some impact on sales from disturbances in the supply chain, and such issues will continue to pose a risk. While we continued to gain share in a growing market, the expected sales reduction in Mainland China, lower variable sales in Managed Services and some supply chain disturbances, led to a negative organic sales development of -1%," he added.
  • Price action: ERIC shares traded higher by 1.15% at $12.35 in the premarket session on the last check Tuesday.
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