Nordic telecom giants
Ericsson and Nokia reported lower-than-expected
profits for the third quarter on Thursday, sending their shares diving as the
rivals stressed rising uncertainty in global markets.
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Ericsson's shares closed down 15 percent on the Stockholm stock exchange
while Nokia tumbled by 7.62 percent in Helsinki.
Sweden's Ericsson reported a net profit of 5.4 billion Swedish kronor ($480
million) between July and September, down seven percent compared to a year
earlier.
It was below analyst expectations of between 5.7 billion and 5.9 billion
kronor, according to surveys by financial data firm FactSet and Bloomberg news
agency.
The lower profits were partly due to Ericsson's $6.2 billion acquisition of
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-percent rise in profit to 428 million
euros ($419 million) -- well short of the 514-539 million euros 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 68 billion kronor, up from
56.3 billion kronor the year before, while Nokia reported a 16-percent rise to
6.2 billion euros.
But their sales were impacted by their departures from Russia following the
invasion of Ukraine.
Nokia's net sales in Russia declined by approximately 70 million euros,
while Ericsson said the withdrawal from the Russian market impacted sales by
800 million kronor.
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