STOCKHOLM (AFP) – Nordic telecom giants Ericsson and Nokia reported lower-than-expected profits for the third quarter yesterday, sending their shares diving as the rivals stressed rising uncertainty in global markets.
Ericsson’s shares sank by more than 11 per cent as the Stockholm stock exhange opened while Nokia tumbled by four per cent in Helsinki.
Sweden’s Ericsson reported a net profit of SEK5.4 billion (USD480 million) between July and September, down seven per cent compared to a year earlier.
It was below analyst expectations of between SEK5.7 billion and SEK5.9 billion, according to surveys by financial data firm FactSet and Bloomberg news agency.
The lower profits were partly due to Ericsson’s USD6.2 billion acquisition of United States (US) cloud communications company Vonage.
Chief Executive Borje Ekholm said the company would “continue to be proactive in reviewing options to reduce costs”.
“Cost efficiency is also crucial to allow investments in technology leadership and to strengthen our resilience in an uncertain market,” Ekholm said in a statement.
He added that Ericsson was making “pricing adjustments” as inflation soars worldwide.
Finnish competitor Nokia reported a 22-per-cent rise in profit to EUR428 million (USD419 million) – well short of the EUR514-539 million forecast by analysts.
Nokia CEO Pekka Lundmark said the quarter demonstrated he was “delivering on our ambition to accelerate growth”, but also stressed the uncertainty in markets.
“As we start to look beyond 2022, we recognise the increasing macro and geopolitical uncertainty within which we operate,” Lundmark said.
Ericsson reported an increase in net sales to SEK68 billion, up from SEK56.3 billion the year before, while Nokia reported a 16-per-cent rise to EUR6.2 billion.
But their sales were impacted by their departures from Russia following the invasion of Ukraine.
Nokia’s net sales in Russia declined by approximately EUR70 million, while Ericsson said the withdrawal from the Russian market impacted sales by CHF800 million.
