Ericsson Results Unhurt by Turmoil
Ericsson posted stronger-than-expect ed third-quarter earnings on Monday, benefiting from heavy network traffic and emerging unscathed from the financial turmoil roiling world markets.
Ericsson, which had been scheduled to unveil quarterly earnings next Friday, made an operating profit of 5.7 billion Swedish crowns ($772.5 million) excluding restructuring charges. The firm, the world's biggest telecom network equipment maker, did not say why it released the numbers four days early.
The result compared with a year-earlier total of 5.6 billion crowns and with forecasts in a Reuters poll of 4.0 billion excluding restructuring charges.
"Our financial position is strong with healthy net cash and high payment readiness. Our business in the quarter has not been impacted by the financial turmoil," Ericsson Chief Executive Officer Carl-Henric Svanberg said in a statement.
"Our customers are generally financially strong. In addition, networks are loaded and traffic shows strong increase," Svanberg said.
"We are seeing initial positive effects from our ongoing cost adjustments."
The company, which said in February it would axe 4 billion crowns from its annual cost base, took a 2 billion crown restructuring charge in the latest quarter. That compared with forecasts for a 563 million crown charge.
(Watch CEO Carl-Henric Svandberg's CNBC interview above).
Svanberg said the cost programme was going according to plan and the firm would keep reducing expenses in the fourth quarter. He said that in the current financial conditions, it was difficult to predict how telecom operators would act.
"In this environment, we continue to adjust our cost base. Our cost adjustment program is running according to plan. The charges we announced earlier have now been exceeded. However, given the present market conditions, we will continue with cost adjustment activities in the fourth quarter, although at a slightly lower pace."
Sales jumped to 49.2 billion crowns from 43.5 billion last year and compared with forecasts for 45.9 billion.