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Ericsson posts strong Q3 on U.S. mobile broadband growth

Fri, 10/22/2010 - 8:00am
Andrew Berg, Wireless Week

Swedish wireless network provider Ericsson today announced $542 million in profits on increased growth in U.S. mobile broadband. That's a 360 percent increase over last year's third quarter. 

Ericsson President and CEO Hans Vestberg said the company has been focused on mitigating the effects of industry-wide component shortage and supply chain bottlenecks, as company's like AT&T and Verizon Wireless seek to provide next-generation networks to their customers.

North American sales were the real driver for Ericsson. The company saw sales to the region increase by 223 percent year-over-year. With strong growth in data services in the U.S. market, Ericsson is seeing operators introducing tiered price plans based on quality and performance. In September, MetroPCS Communications launched LTE together with Ericsson in the Dallas market.

Networks' sales in the quarter increased by 6 percent year-over-year, which the company says was positively impacted by the acquired Nortel businesses. Sequentially, sales increased 2 percent.

The company's gross margins saw a 3 percent increase over the year-ago quarter, rising from 36 percent to 39 percent.

"The situation has gradually improved during the quarter, but it remains a challenge to fully meet the demand for mobile broadband. While the supply chain bottlenecks have been resolved, the industry-wide component shortage remains," Vestberg said.

Ericsson's stock rose 5.5 percent in early morning trading to $11.39 per share.

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