On October 15th, Swedish telecommunications equipment manufacturer $LM Ericsson Telephone (ERIC.US)$reported third-quarter profits exceeding market expectations, largely benefiting from the company's cooperation with American operators$AT&T (T.US)$showing results. In pre-market trading on Tuesday, Ericsson rose more than 8%.

The financial report shows that LM Ericsson Telephone's adjusted EBIT for the third quarter was 7.3 billion Swedish Krona (equivalent to 0.699 billion US dollars), far exceeding the analyst's expected 5.6 billion Krona. The adjusted operating margin was 11.9%, while the market expected 8.5%.

LM Ericsson Telephone's CEO Börje Ekholm stated: "We see signs of overall market stabilization, with the North American market, as an early adopter, showing signs of growth recovery. While market development ultimately lies in the hands of customers, we are committed to achieving operational excellence regardless of market conditions."

Due to operators reducing or delaying network investments, the telecommunications equipment market has experienced a difficult period over the past few quarters. LM Ericsson Telephone has taken proactive cost-cutting measures, including laying off thousands of people, and signed a $14 billion contract with AT&T last December, gaining investor confidence. As of Monday, LM Ericsson Telephone has risen by 24% this year.

LM Ericsson Telephone previously stated that the OpenRAN contract signed with AT&T will increase revenue in the second half of this year. OpenRAN technology allows operators to flexibly choose suppliers for antennas and infrastructure.

LM Ericsson Telephone's CFO Lars Sandström stated in an interview that after sales were "exceptionally low" at the beginning of the year, sales for this quarter are now "exceptionally high". He expects the next quarter and the new year to stabilize.

However, demand for equipment in some major markets has declined. India was one of the fastest countries to deploy 5G in 2022, but the country has slowed down spending, while many US operators have accumulated a large amount of equipment. Dell 'Oro Group, tracking the telecommunications industry, stated that in the first half of 2024, telecommunications operators' spending decreased by 10% compared to the same period last year, and will continue to decline for the rest of this year.

Ekholm added that lm ericsson telephone recently announced the establishment of a joint venture company with 12 other telecommunications operators to create an interface for application developers to access all mobile networks, which will continue to create new opportunities for "network monetization."

LM Ericsson Telephone's competitor in northern Europe.$Nokia Oyj (NOK.US)$Will announce third-quarter financial report on Thursday.