Uncertainties about growth in North America sent shares of Ericsson’s lower Friday as the Swedish network equipment manufacturer posted third-quarter earnings.
Ericsson posted third-quarter revenue of $7.9 billion, up 9 percent annually. Operating income was down 9 percent from last year at $537 million, while gross margins increased annually from 32 percent to 35.2 percent on increased efficiencies.
Ericsson attributed the drop in profits to the revaluation of unrealized currency hedging contracts and a hike in expenses.
North America was the glaring uncertainty for investors. The United States and Canada account for approximately a quarter of Ericsson’s business. The company said that business activity in North America slowed during the quarter as operators like AT&T, Verizon, and Sprint refocused on cash flow optimization.
“However, it has to be said that the consumer demand that’s happening in North America is continuing, there were a lot of new phones on the market, which are always important for the growth of the market,” noted Ericsson CEO Hans Vestberg in comments posted online.
China, Taiwan and Japan remained bright spots for Ericsson, as the company continues to execute contracts for LTE deployments in those countries.
Shares of Ericsson were down over 3 percent in early trading Friday to $11.42.
Filed Under: Infrastructure