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Ericsson's operating profit amounted to 3.2 billion SEK, compared with a loss of 3.7 billion SEK for the corresponding period of the previous financial year.
Estimate of restructuring costs – Ericsson has profoundly changed its organization – its adjusted operating profit amounted to SEK 3.8 billion.
Ericsson has therefore realized much better than the average group analyst forecast. On average, they estimated that adjusted operating profit would remain at 2.4 billion euros, according to the Direkt news agency.
The net business turnover of the group increased by 9%, rising from 49.4 billion SEK in the third quarter of last year to 53.8 billion SEK for the corresponding quarter of this year.
Under the leadership of Börje Ekholm, Ericsson has undergone a powerful reorganization, which has also put in place important savings programs. But Ekholm is not yet satisfied because "there is still a lot of work to get satisfactory results in all parts of the business," he wrote in his comment about the CEO.
Yet, Ekholm could say at a press conference in the morning, Ericsson is now a profitable company.
"This is the first time since 2016 that the company is profitable," he said.
Börje Ekholm points out in the comments about the improvements made to the different parts of the group that led to the result. In particular, he highlights the growing interest in 5G services around the world.
This will result in increased costs for Ericsson as extensive field testing is required.
"The costs are quite high, but we hope to absorb them in our results," Ekholm told DN.
Costs have already been taken when management has concluded that the Group should have an operating margin of 10% in 2020 and 12% thereafter. Today, Ericsson has an operating margin of 7%.
The care child for the Group is the Digital Services business, which is not yet profitable, but improvements have also been made here. This occurred, for example, because Ericsson terminated or renegotiated a number of unfavorable contracts.
Börje Ekholm thinks that the expression revenge is an unfair description of digital services.
– I do not think it's fair to say that. As we enter 5G, we need powerful digital services. We are not satisfied, but it's okay. It's important, he says.
Although most looks to get better for Ericsson after the major restructuring of last year, there is an old leaven that can be very expensive. This is an investigation into alleged corruption cases in the Middle East and Asia, conducted by the US Financial Supervisory Authority (SEC) and the Department of Justice (DOJ).
Ericsson has been cooperating with the SEC and the GM since the beginning of 2013, but the CEO presumes that the investigation "will result in monetary and other measures." In other words, fine fine fine. What size does Ekholm not know?
"I would like to be able to give you more, but we do not know, if we had known, we would have said it." He says.
"But with a high probability, this will result in a form of fine," adds Ekholm.
But are not you fining your target for the 2020 margin?
"If we get heavy fines in 2020, it will be difficult to reach a ten percent margin thereafter, I'm honest to say," said Ekholm.
At the press conference, Ekholm pointed out that about 50 people had left the group as a result of Ericsson's investigation into the alleged corruption scandal.
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