European telecom giants Ericsson and Nokia reported their third-quarter results of 2022 on Thursday with lower-than-expected profits. Ericsson stocks slumped over 15% while Nokia’s share price was around 6.7% down, and both were among the worst performers in the market after releasing their quarterly reports.

The OMX Stockholm 30 index fell by 2.51% on Thursday, while Finland’s OMX Helsinki 25 was down by 1.51%. 

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Swedish telecom equipment maker Ericsson reported adjusted operating earnings of 7.1 billion Swedish crowns ($633.05 million) against 8.8 billion crowns in a year-ago period. Revenue rose to 68 billion crowns from 56.3 billion against that in the corresponding quarter a year earlier.  The gross margin declined to 41.4% from 44.0% impacted by ongoing patent disputes. 

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“We are very confident about our patents portfolio and we are in no rush to strike a deal. We are heading to make sure we get a good mutually beneficial deal,” said Carl Mellander, Ericsson CFO. All the pending royalties are paid in a lump sum, as the agreement is reached, he added.

Nokia’s reported quarterly profit was also lower than market expectations. The company’s operating profit rose to 658 million euros ($643.3 million) against the year-ago quarter’s profit of 633 million euros. 

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Both companies expect significant benefits from 5G equipment investments this year. But both warned of cooling down of their primary market, which is North America.

“The market of North America has grown at a high pace this year and it’s prudent to expect some kind of normalization of the market,” Nokia Chief Executive Pekka Lundmark said in an interview.

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“But it’s too early to give detailed estimates because the operators have not yet announced their capex plans for next year,” he added.

The companies are expecting major growth in their businesses in India.  Recently, India’s top telecom service providers Reliance Jio and Bharti Airtel have chosen Nokia and Ericsson as their equipment suppliers for deploying 5G services across the country.