Ericsson profit grows 19% in Q3

26 Oct 2015

Ericsson grew its net profit for the third quarter by 19% year-on-year to 3.1 billion krona ($364.6 million), as a result of lower operating costs and a break-even result for network rollout revenue.

The vendor's reported sales grew 3% year-on-year to 59.2 billion krona. But adjusted for comparable currency conversions, sales fell 9% due to lower networks revenue.

Ericsson said sales growth remained strong in India, Southest Asia and Oceania, but sales declined in Northeast and Central Asia as well as Northern Europe.

A slowdown in China's major 4G rollouts also contributed to the decline in constant currencies.

Professional services sales by contrast grew 15% year-on-year. As a result of this growth as well as improvements in the profitability of Ericsson's network rollout segment, Global Services operating margin grew to 9%.

Ericsson also made progress with its cost cutting program, which aims to achieve annual net savings of 9 billion krona for 2017. Despite major payouts as part of the cost-cutting program, the company said it had achieved a positive cash flow for the second straight quarter.

The company said it is focusing its attention on targeted growth areas including network architecture for 5G, virtualization, the IoT and efficient video delivery.

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