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Ericsson Q3 net income stable

Christian Fernsby |
Ericsson Q3 organic sales development in Networks was stable YoY.

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The quarter was impacted by market share loss in Mainland China. Reported EBIT margin was 23.7% (22.0%).

Reported net income was SEK 5.8 (5.6) b.

Free cash flow before M and A was SEK 13.0 (3.9) b. driven primarily by strong cash collection. Net cash per September 30, 2021 was SEK 55.7 b. compared with SEK 41.5 b. per September 30, 2020.

Investor Update (Nov. 9) will be postponed into next year with the intent to host a full day, in person CMD with the entire executive management present.

Group organic sales declined by -1% YoY. Sales in Mainland China in Networks and Digital Services declined by SEK -3.6 b. impacting the growth rate by -6%. Some impact was seen from disturbances in the supply chain. Reported sales were SEK 56.3 (57.5) b.

Gross margin excl. restructuring charges improved to 44.0% (43.2%) mainly driven by increased and partly retroactive IPR revenues and the acquired Cradlepoint business. Operational leverage continued to be strong in Networks. Reported gross margin was 44.0% (43.1%).

EBIT margin excl. restructuring charges increased slightly to 15.7% (15.6%). Reported EBIT increased to SEK 8.8 b. (15.7%) from SEK 8.6 b. (15.0%). EBIT was supported by a market revaluation of investments and an impairment write-off, amounting to SEK 0.4 b.

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