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ERICSSON

Ericsson shares continue to plunge

Shares in telecom equipment maker Ericsson continued to plummet in early trading on the Stockholm Stock Exchange on Wednesday.

After just a few minutes of trading, Ericsson’s share price had fallen back a further 4 percent. This followed an 11 percent drop on Tuesday afternoon after CEO Carl-Henric Svanberg reiterated earlier warnings.

At a meeting with investors in New York, the company said it expects fourth-quarter sales to be at the lower end of its prior outlook, hurt by softness in Europe and the U.S. and political unrest in emerging markets, which account for more than half of the company’s sales.

Shares of LM Ericsson AB also emerged as one of Tuesday’s biggest decliners on the New York Stock Exchange in the telecommunications sector as the broader market also retreated.

Citi Investment Research analyst Sherief Bakr called the comments “another blow to investor confidence,” but reiterated a “Buy” rating on the stock.

“Management’s comments regarding ‘worrying’ near-term market dynamics suggest that margin recovery will likely be pushed into (the second half of 2008,” he wrote in a note to clients.

TT/AFP/The Local

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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