(AOF) – Ericsson presented results below analysts’ forecasts, its profitability having been penalized by a lower contribution from the United States, a high-margin country. In the third quarter, the Swedish telecom equipment manufacturer generated a net profit down 39% to 6.2 billion Swedish crowns (555.44 million euros). Its profitability came out below the expectations of specialists.
Analysts’ favorite measure of profitability in the sector, gross margin (adjusted for restructuring charges) fell 2 points to 41.5%, compared with a consensus of 43.4%.
Operating profit (Ebita), still corrected for exceptional items, fell by 27% to 9.3 billion Swedish crowns. The operating margin, excluding exceptional items, stood at 10.8% against 17.9% a year earlier.
Group sales for their part increased by 21% to 86 billion crowns, supported by the acquisition of Vonage (4.1 billion crowns). They increased by 1% like-for-like. The market was for 84.55 billion crowns.
Ericsson also announced 9 billion crowns in savings from the second quarter of 2023 to deal with short-term uncertainties.
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The Threat of Open Technology, RAN
Equipment manufacturers will have to face this threat in the next few years. This new architecture consists in replacing the traditional antennas by software allowing more interoperability thanks to the cloud. Telecom operators will thus be able to reinforce innovation and increase their choice of suppliers. They will also be able to have access to more services and flexibility for network deployment and management costs which should decrease. For the moment, none of the major operators has switched to this new technology. Nevertheless, the freedom of choice of suppliers is a decisive element, underlined by the decision of Europe and the United States to sanction the Chinese Huawei for national security reasons.