Ericsson's third-quarter sales growth in North America leads to a 10% increase in share price.

• On Tuesday, Ericsson announced its adjusted third-quarter earnings, excluding impairments, of 7.327 billion Swedish crowns ($0.7 billion), which exceeded the 5.75 billion crown mean forecast of analysts surveyed by Reuters.
• More than 50% year-on-year growth was observed in North America's sales performance, making it stand out as a positive aspect in the sales landscape.
• Last year, the company strengthened its position in the U.S. market by defeating its Finnish competitor Nokia and securing a substantial contract with carrier AT&T.

Ericsson's shares rose in the third quarter due to higher-than-expected core earnings and increased demand in North America.

The company's stock was up 10% at 12:17 p.m. in London.

On Tuesday, Ericsson announced its adjusted third-quarter earnings, excluding impairments, of 7.327 billion Swedish crowns ($0.7 billion), which surpassed the 5.75 billion crown mean forecast of analysts cited by Reuters.

Despite a 4% year-on-year decline in net sales to 61.8 billion Swedish crowns in the third quarter, the company still managed to exceed analyst expectations of 61.6 billion, according to Reuters estimates. North America was the standout region, with year-on-year growth of over 50%.

"Ericsson CEO Börje Ekholm stated on CNBC's "Squawk Box Europe" that the market has been challenging for various reasons for a long time. However, he expressed optimism as he noticed some signs of stabilization."

The company secured a significant contract with AT&T in the U.S. last year, which helped it strengthen its position in the country's telecom market.

Ekholm stated that North America was the first to introduce 5G, but this also slowed down the pace. However, they are now returning, which fuels optimism that we can see coming.

He recognized the increase in demand for 5G due to the growth in consumer mobile internet, stating that data growth is continuing at a high pace. As a result, new investments are necessary.

Despite third-quarter sales declines in both north east and south east Asia, the North American growth offset these declines, as telecommunication companies have recently been focusing on developing markets such as India.

Ekholm stated that India is experiencing a distortion in its 5G access rollout, which inflated sales in 2023. Despite this, he sees growth opportunities in the region for the company, which is currently hurting from a lower presence in China.

Ericsson reported a 7.1% increase in adjusted gross margin to 46.3% in the third quarter, compared to 39.2% in the same period last year. The strong gross margin and Ericsson's outlook comments led UBS analysts to forecast a 5-10% upgrade in the company's consensus earnings before interest and tax (EBIT) for 2024, with likely similar results in 2025.

Ericsson's Tuesday results indicate a recovery from its recent struggles with declining demand for its 5G equipment, which led to the announcement of job cuts in March. The company had previously laid off 8,500 employees worldwide, or about 8% of its workforce, in an effort to reduce costs.