Ericsson hit by falling profits

Swedish telecom equipment manufacturer Ericsson announced third quarter pretax profits of 4 billion kronor ($580 million), a 35 percent drop from the 6.2 billion kronor reported for the same quarter last year.

Ericsson hit by falling profits

Net profits fell to 810 million kronor for the quarter, down from 2.84 billion a year earlier and below analysts’ expectations of 1.65 billion kronor, according to the Market Watch news service.

Ericsson’s turnover also dropped from 49.2 billion in the third quarter of 2008 to 46.4 billion this year.

The company’s pretax profits exclude restructuring costs of 2.7 billion kronor, which when included bring Ericsson’s profits to 1.5 billion kronor

Analysts had expected Ericsson to report pretax profits of 2.5 billion kronor, according to a Reuters survey.

“Our cost reduction activities are running ahead of plan with further opportunities for efficiency improvements and savings, Ericsson CEO Carl-Henric Svanberg said in comments accompanying the report.

While admitting that a “tougher market environment” had led to a drop in sales, Svanberg remained upbeat about Ericsson’s prospects to capitalize on the growth of mobile broadband services.

“We expect mobile broadband to show a similar exciting development over the years to come, not least as the vast majority of the world’s population will be able to reach internet only through mobile technology. We are well positioned to lead our industry forward,” he said.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.


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.