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.