Ericsson is one of the first major companies to kick off the reporting season, and it did so with surprisingly strong interim results.
We are delivering a strong third quarter, driven by our core business, CEO Per Narvinger tells TT.
“Secure access”
The company expects higher costs for components to persist. Ericsson is competing with major AI companies for the same components.
Many of the components we use are also used in AI data centers, Narvinger says.
Strong growth in AI has in turn driven up prices, Narvinger says.
“You even have to work to secure the availability of memory. But really, we are seeing price increases across the board in semiconductors,” Narvinger says. He believes Ericsson will have to raise prices in the long term.
Making changes
Ericsson's adjusted operating profit (EBITA) came in at SEK 10.1 billion, compared with market expectations of SEK 7.9 billion. The company's sales also beat analysts' forecasts.
The telecom company also expects the operating margin in its important Networks business area to be 49–51 percent in the fourth quarter. This is also above market expectations.
Alongside the report, Ericsson announced changes to its group management. It will also merge business areas in Asia and Oceania.
