Struggling Ericsson Stock Surges on Better Q3 Earnings

Ericsson's shares rose by 7.6% on Tuesday following the release of its third-quarter earnings, which outperformed market expectations. Earlier in the day, the stock had climbed nearly 9% before settling at its current level. 

The Swedish telecom giant reported adjusted earnings of $700 million, more than double the amount earned during the same period last year. Analysts had forecast earnings of around $550 million..  

A key driver of this performance was the North American market, which saw more than 50% growth compared to the previous year. CEO Börje Ekholm noted signs of market stabilization, particularly in the U.S., which provided optimism for future growth. Ericsson's win over Nokia in securing a major contract with AT&T last year to develop a network using ORAN technology has bolstered its U.S. presence. 

The results come amidst Ericsson's efforts to navigate slowing demand for 5G equipment, which led the company to implement cost-cutting measures earlier this year, including layoffs of 1,200 employees in Sweden and 8,500 globally. Ekholm highlighted that consumer mobile internet demand growth continues to drive 5G investments, supporting future prospects.  

In other regions, the company faces challenges. Sales in both northeast and southeast Asia declined, with a focus on emerging markets like India contributing to regional disruptions. However, Ekholm remains optimistic about long-term growth opportunities in these areas. Ericsson also reported an improved gross margin of 46.3% for the quarter, up from 39.2% last year, driven by a refined market mix and cost management