By Dominic Chopping

STOCKHOLM--Sweden's Ericsson is due to report third-quarter earnings on Tuesday. Here is what you need to know:

NET PROFIT: The telecom-equipment maker is expected to post a net profit of 10 billion kronor ($1.05 billion), according to a consensus provided by FactSet, compared with 3.9 billion kronor in the same period a year prior. Following the sale of its Iconectiv business, Ericsson is expected to receive 9.9 billion kronor in cash and cash equivalents and report a one-time gain of 7.6 billion kronor in the third quarter, Kepler Cheuvreux analyst Sebastien Sztabowicz said in a note. "This provides a clear boost to both reported earnings and cash flow."

SALES: A FactSet forecast expects sales to fall 8.6% to 56.49 billion kronor from 61.8 billion kronor a year earlier.

The stock is up around 2.2% from a year ago and trades at 79.28 kronor on Monday.

WHAT TO WATCH:

--Ericsson has guided for a third-quarter adjusted gross margin in the networks unit in the range of 48% to 50%. In the second quarter, the company reported a solid group adjusted gross margin at 48%, driven by higher licensing revenues and cost savings in networks, a higher share of software sales in cloud software and services, and a stronger product mix in enterprise. Jefferies expects a third-quarter group gross margin of 46%, mainly due to a drop in licensing revenues.

--Ericsson's revenue trend in networks is expected to be somewhat flattish going forward as the company de-emphasizes some markets like Latin America, while prioritizing North America, Japan and India, Jefferies said. "This is, however, expected to be supportive of gross margins given the relatively high margins in the U.S. and Japanese markets." The company expects sequential network sales growth to be below the three-year average seasonality of 3% after the second quarter benefited from a one-off licensing revenue.

--Although the radio access network market is still expected to stabilize in 2025--after the decline in 2023-24--growth opportunities will remain limited in the coming years, Kepler Cheuvreux's Sztabowicz said. "The 5G cycle peaked in 2021, and we do not see any major sales growth in the coming quarters."

Write to Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

October 13, 2025 04:25 ET (08:25 GMT)

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