Higher Costs Affected Ericsson’s Business in 3Q22

Higher component and logistics costs hit Ericsson’s margins in the third quarter of 2022. The Swedish vendor reported higher revenue in the period, while its operating profit went down.

Ericsson's quarterly adjusted operating earnings dropped to SEK 7.1 billion ($633.05 million) from SEK 8.8 billion in 2021. The company's quarterly revenue rose to SEK 68 billion from SEK 56.3 billion YoY. Gross margin fell to 41.4% from 44.0% as it was also hit by lower royalty revenue due to ongoing patent disputes.

“Group Net Sales in the quarter grew by 3% organically, driven by a strong performance from Networks. EBITA (excluding restructuring charges) of SEK 7.7 billion corresponding to a margin of 11.3%, where higher gross income from business growth was offset by increased technology investments and the consolidation of Vonage with acquisition accounting and one-time acquisition costs,“ said Börje Ekholm, President, and CEO of Ericsson.

“We continue to solidify our strong position in 5G to capture the considerable opportunities presented by the fastest-scaling mobile generation. Our expansion into the exciting high-growth Enterprise space is gaining momentum with the acquisition of Vonage, providing us with access to a powerful range of cloud communication services,“ added Ekholm.