Ericsson has reported stronger-than-expected core earnings and sales for the third quarter, driven by a resurgence in demand for 5G equipment in North America. The telecom giant noted signs of recovery in the telecommunications equipment market. As a result, its stock surged 9% during early trading, reaching its highest level since April 2022.
In recent years, reduced demand from North American mobile operators affected companies like Ericsson and Nokia, which turned to emerging markets such as India for growth, often at the cost of lower profits. Ericsson's net sales for the third quarter decreased by 4% to 61.8 billion Swedish kronor (approximately $5.92 billion), surpassing the expected 61.6 billion kronor. Core sales dipped by 1%.
According to Danske Bank Credit Research Analyst Mads Lindegaard Rosendal, the 1% year-on-year decrease in net sales marks a significant improvement from the 7% drop seen in the second quarter.
Sales in the North American region rose by over 50%, reaching 20.4 billion kronor. This growth was partly attributed to increasing sales to AT&T following a $14 billion five-year agreement with the company last year. Meanwhile, last year's growth driver, India, has shown signs of a slowdown.
