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Ericsson saw its net loss widen to SEK 4.3 billion for the third quarter, from SEK 0.2 billion a year ago, due to a number of one-time restructuring costs and writedowns. Revenues at the network equipment maker also fell 6 percent, to SEK 47.8 billion, and adjusted operating profit, excluding all the charges, was breakeven, according Telecompaper. Ericsson said it took provisions for risky projects of SEK 2.3 billion, as flagged already in the previous quarter. Restructuring charges totaled SEK 2.8 billion, including a write-down of SEK 1.6 billion for the decision to close and sell its ICT centre in Canada.
 
Borje Ekholm said the company was starting to see some encouraging improvement in performance despite a continued challenging market. The Networks division showed slight sales growth year-over-year, excluding the impact of rescoped managed services contracts in North America and currency effects, as well as an adjusted operating margin was 11 percent. While losses continue in IT & Cloud, the company said it sees increased stability in product roadmaps and projects.
 
The general market conditions remain "tough", Ericsson said. Sales adjusted for comparable units and currency declined by 3 percent annually. Sales in North America market were flat on a comparable basis, and the Chinese market declined as 4G deployments slowed. The company still expects the total RAN market to decline around 8 percent this year. 
 
Looking ahead, Ericsson said it expects the sequential sales growth usually seen in Q4 to be slower this year, due to the slowdown in China. Sales are also impacted by its ongoing work to exit or renegotiate underperforming contracts, which is expected to reduce full-year sales by up to SEK 10 billion by 2019.
 
The goal remains cost savings with an annual run rate of at least SEK 10 billion by mid-2018. At the same time, R&D expenses will increase primarily in Networks, in order to maintain technology leadering. The higher amortization of development expenses and higher recognition of hardware costs already impacted Q3 operatign profit, and this is expected to continue in Q4, 2018 and 2019. 
 
In addition, another SEK 3-4 billion in restructuring charges will be booked in Q4 2017, and the earlier estimated risks of market and customer project adjustments are now expected to be at the high end of the guided range of SEK 3-5 billon. 
 
Ericsson said managing cash remains a top priority. The negative free cash flow reduced to SEK 0.5 billion in Q3 from SEK 5.0 billion a year earlier. Net cash was at SEK 24.1 billion at the end of September, up from SEK 16.3 billion a year ago.