Nordic telecom giants Ericsson and Nokia reported lower-than-expected profits for the third quarter on Thursday, sending their shares diving as the rivals stressed rising uncertainty in global markets.
Ericsson’s shares sank by more than 11 percent as the Stockholm stock exhange opened while Nokia tumbled by four percent in Helsinki.
Sweden’s Ericsson reported a net profit of 5.4 billion Swedish kronor ($480 million) between July and September, down seven percent compared to a year earlier.
It was below analyst expectations of between 5.7 billion and 5.9 billion kronor, according to surveys by financial data firm FactSet and Bloomberg news agency.
The lower profits were partly due to Ericsson’s $6.2 billion acquisition of US cloud communications company Vonage.
Chief executive Borje Ekholm said the company would “continue to be proactive in reviewing options to reduce costs.”
“Cost efficiency is also crucial to allow investments in technology leadership and to strengthen our resilience in an uncertain market,” Ekholm said in a statement.
He added that Ericsson was making “pricing adjustments” as inflation soars worldwide.
Finnish competitor Nokia reported a 22-percent rise in profit to 428 million euros ($419 million) — well short of the 514-539 million euros forecast by analysts.
Nokia CEO Pekka Lundmark said the quarter demonstrated he was “delivering on our ambition to accelerate growth,” but also stressed the uncertainty in markets.
“As we start to look beyond 2022, we recognise the increasing macro and geopolitical uncertainty within which we operate,” Lundmark said.
Ericsson reported an increase in net sales to 68 billion kronor, up from 56.3 billion kronor the year before, while Nokia reported a 16-percent rise to 6.2 billion euros.
But their sales were impacted by their departures from Russia following the invasion of Ukraine.
Nokia’s net sales in Russia declined by approximately 70 million euros, while Ericsson said the withdrawal from the Russian market impacted sales by 800 million kronor.