Ericsson reported a near-tripling of its third-quarter net profit, boosted by a significant one-time gain from the sale of its iconectiv business, even as revenue declined.
The Swedish telecommunications equipment maker said net income rose to 11.3 billion Swedish kronor from 3.9 billion kronor a year earlier, a figure that included a 7.6 billion kronor capital gain from the divestment.
Reported sales for the quarter fell 9% to 56.2 billion kronor, while organic sales, which adjust for currency effects and divestments, declined by 2%, according to the company.
The sale of iconectiv, a provider of network and operations management services, was completed in August as part of Ericsson's strategy to streamline operations and focus on its core network equipment business.
"Solid recurring cash flow and the iconectiv sale contributed to a strong Q3 cash position, offering scope for increased shareholder distributions," said President and CEO Börje Ekholm.
The company stated that the board's recommendation on any potential distribution will be announced with its fourth-quarter results.
Despite the strong profit, free cash flow before mergers and acquisitions nearly halved to 6.6 billion kronor from 12.9 billion kronor in the same period last year.
Looking ahead, Ericsson said it expects the market for its Radio Access Network equipment to remain broadly stable.
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