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ERICSSON

Ericsson results disappoint

Swedish telecommunication equipment maker Ericsson on Friday reported a gain in second quarter net earnings but its sales performance fell short of market expectations.

Ericsson results disappoint

Ericsson said its net profit in the April-June period rose 12.3 percent to

6.4 billion kronor (698 million euros, 962 million dollars) compared with the same quarter last year.

Sales gained 8.2 percent to 47.6 billion kronor. Analysts surveyed by SME-Direkt had foreseen a sales total of 48 billion kronor.

Ericsson shares fell 1.94 percent in early trading on the Stockholm exchange, which was down 0.17 percent.

The group said its operating margin rose one point in annual terms to 19.4 percent, just shy of expectations by analysts for a margin of 20.2 percent.

Operating earnings surged 12 percent to reach 9.3 billion kronor, again short of the 9.8 billion expected by analysts.

Nonetheless, Ericsson chief executive Carl-Henric Svanvberg described the quarter as “encouraging.”

“We continue to outpace the market,” he said in a statement.

“Sales showed an encouraging year-over-year increase this quarter, primarily driven by Asia Pacific. Europe, Middle East and Africa were softer while we see improving trends in the Americas. Margins were stable with improved cash generation.”

SWEDEN AND UKRAINE

Ericsson suspends all Russia operations indefinitely

Swedish network equipment maker Ericsson said Monday that it was suspending all of its Russian operations over the war in Ukraine for the foreseeable future.

Ericsson suspends all Russia operations indefinitely

The telecom giant already announced in late February that it would stop all deliveries to Russia following Moscow’s February 24 invasion of Ukraine.

“In the light of recent events and of European Union sanctions, the company will now suspend its affected business with customers in Russia indefinitely,” Ericsson said in a statement.

The company added that it was “engaging with customers and partners regarding the indefinite suspension of the affected business.”

“The priority is to focus on the safety and well-being of Ericsson employees in Russia and they will be placed on paid leave,” it said.

READ ALSO: How has Sweden responded to Putin’s war in Ukraine so far?

Hundreds of Western firms ranging from Ikea to Coca-Cola, Goldman Sachs and McDonald’s have stopped operations in the country since the invasion, with French banking group Societe Generale announcing Monday it was selling its stake in Russia’s Rosbank.

Ericsson has around 600 employees in Russia, and is a “major supplier to the largest operator MTS and the fourth largest operator Tele2,” a company spokeswoman told AFP, adding that together with Ukraine, Russia accounts for less than two percent of revenue.

As a result, the equipment maker said it would record a provision for 900 million Swedish kronor ($95 million, 87 million euros) for the first quarter of 2022 for “impairment of assets and other exceptional costs,” though no staff redundancy costs were included.
Ericsson is due to publish its first quarter earnings on April 14.

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