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5G: Here’s Why Ericsson Share Price Surged to Record Highs Today

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Nigel F

Shares of Ericsson (STO: ERIC) gained as much as 9% to hit fresh record highs after the company reported better-than-expected third-quarter earnings.

Ericsson has continued to benefit from the 5G infrastructure rollout with the number of contracts surging to 112. The Swedish giant posted the third-quarter adjusted operating earnings of 9.0 billion Swedish crowns ($1.0 billion).

This is much higher than 6.5 billion crowns reported a year ago. Surveyed analysts expected a profit of 6.98 billion crowns. Revenue also jumped by 1% to 57.5 billion crowns.

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Gross margins also rose, hitting 43.2% from 37.8% a year ago.

“While the pandemic has hurt revenues for several of our customers, and in some cases this has led to a reduction of capex, we have not seen any negative impact on our business, largely due to footprint gains,” Chief Executive Borje Ekholm said in a statement.

“The 5G roll out in China was the big driver in this quarter,” Ericsson CFO Carl Mellander told Reuters. Ericsson won 3 big contracts in China.

Ericsson share price rose 9% to new record highs October 2020

Ericsson share price rose 9% to hit 116.4 and exceed the previous all-time high at 114.8 set in July.

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Nigel F
Nigel F
Team Member

Nigels tiefes Verständnis der Finanzmärkte basiert auf über 10 Jahren Erfahrung. Nigel wurde bisher zweimal von der FCA (Financial Conduct Authority) autorisiert und hat in der letzten Zeit eine Finanz-Brokerage Firma besessen und verkauft. Er liefert hochaktuelle Analysen und Einsichten in die Finanzmärkte und in die allgemeine Wirtschafts- und Währungspolitik des Vereinigten Königreichs, der USA, Europas und Asiens.