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Ericsson Turns To Profit In Q3; Says Tracking Well Towards 2020 Targets

Ericsson (ERIC) reported that its net income for the third-quarter was 2.7 billion Swedish kronor, compared to a loss of 3.5 billion kronor last year. Earnings per share were 0.83 kronor, compared to a loss of 1.09 kronor in the prior year.

Non-IFRS earnings per share were 1.03 kronor compared to a loss of 0.29 kronor in the previous year.

Net sales increased 9% to 53.8 billion kronor from 49.4 billion kronor last year. Sales adjusted for comparable units and currency increased by 1%.

The company said it continues to execute on focused strategy, tracking well towards 2020 targets. It sees improvements across businesses resulting in a gross margin of 36.9% (28.5%) and an operating margin of 7.0% (-1.7%). Organic sales growth was 1% for the Group, despite headwind from exited non-strategic contracts.

The company noted that it continues to invest in competitive 5G-ready portfolio to enable customers to efficiently migrate to 5G. Operators around the world plan for launching 5G services, led by North America. It expects the costs to remain on high levels, at least for the coming 12-18 months, and they are included in 2020 profitability target of at least 10%.

The company said it remains confident in reaching its long-term target of at least 12% operating margin beyond 2020.

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