$ERIC (+2.3%) | Ericsson Q3'24 Earnings Highlights:

🔹 GAAP EPS: $0.11 (Est. $0.08) 🟢 

🔹 Net Profit: SEK 3.81B (Est. SEK 3.15B)

🔹 Sales: SEK 61.79B (Est. SEK 61.61B) 🟢; DOWN -4.2% YoY 

🔹 Adj EBIT: SEK 7.3B (Est. SEK 5.6B) 🟢 

🔹 Adj Operating Margin: 11.9% (Est. 8.5%) 🟢; UP from 7.9% YoY 

🔹 Free Cash Flow: SEK 12.9B (Est. SEK 2.8B) 🟢

Segment Performance:

🔹 Networks Sales: SEK 40.0B; DOWN -4% YoY;

—Organic Sales DOWN -1% YoY 

🔹 Networks Adjusted Gross Margin: 48.7% (Guidance: 45%-47%) 🟢; UP from 39.9% YoY 

🔹 Strong Networks Sales Growth in North America offset by declines in other markets 

🔹 Enterprise Segment: Anticipate further near-term sales pressure

Guidance for Q4'24:

🔹 Expects Networks Adjusted Gross Margin: 47%-49% 

🔹 Expects Networks Sales Growth to be below the three-year seasonal average, after a stronger-than-average Q3

CEO Börje Ekholm's Commentary:

🔸 "We see signs that the overall market is stabilizing with North America, as an early adopter market, returning to growth." 

🔸 "While the market development is ultimately in the hands of our customers, we are working to deliver operational excellence regardless of market conditions." 

🔸 "Essential to find new revenue streams for customers." 

🔸 "Market is still challenged."

CFO Lars Sandström's Commentary:

🔸 "Cost-cut benefits and supply chain improvements have come a bit faster than expected." 

🔸 "Expect AT&T deployment ramp-up to normalize a little in Q4 and into next year."

Additional Highlights:

🔸 Adjusted EBITA margin increased 530 basis points to 12.6%, 280 basis points above expectations 

🔸 Free Cash Flow significantly exceeded estimates due to strong operational performance 

🔸 Ericsson shares rose over 9% following the earnings release 

🔸 Upgraded to investment-grade credit rating by Fitch, recognizing continued progress on debt reduction