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TELECOM

Ericsson beats expectations

Swedish telecom infrastructure group Ericsson reported on Friday a dramatic fall in first-quarter net profits compared to the equivalent figure last year, but the result beat expectations and sent its share price soaring.

Ericsson beats expectations

For the January-March quarter, Ericsson said its net profit had been more than slashed in two to 2.6 billion kronor ($434 million), down from 5.8 billion kronor a year earlier.

The world’s leading mobile telecom infrastructure company also saw its operating income drop 47 percent to 4.3 billion kronor, according to its earnings statement.

Ericsson’s announcement that its operating margin had slumped 14 percent to 9.7 percent meanwhile beat the 9.0 percent margin analysts polled by SME-Direkt had expected for the quarter.

The company’s net sales for the period meanwhile climbed 4.74 percent to 44.2 billion, again beating analyst expectations of 41.8 billion kronor.

After issuing its report, Ericsson saw its stock price open up 20.9 percent at 15.02 kronor on the Stockholm stock exchange. By 0830 GMT, its shares were showing a gain of 21.54 percent to 15.12 kronor in a market up 2.46 percent on average.

“Our business developed well in the quarter, considering the present market environment and the declining US dollar,” company president and chief executive Carl-Henric Svanberg said in the statement.

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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