Ericsson’s profit disappointed investors
2023.01.20 03:12
Ericsson’s profit disappointed investors
By Kristina Sobol
Budrigannews.com – Ericsson, from Sweden (BS:) on Friday announced core earnings for the fourth quarter that fell short of expectations for the third consecutive quarter, as 5G equipment sales slowed in high-margin markets like the United States.
Adjusted operating earnings, excluding restructuring costs, decreased to 9.3 billion Swedish crowns ($902 million) in the most recent quarter from 12.8 billion crowns a year earlier. Data from Refinitiv indicate that analysts’ mean forecasts for core earnings were 11.22 billion.
Net sales exceeded estimates of 84.2 billion crowns, rising 21% to 86 billion crowns.
a patent deal settlement with Apple (NASDAQ:) While Ericsson received 4 billion crowns in charges last month, which included a provision for a potential fine from U.S. regulators and divestments, it also generated 6 billion crowns in revenue.
Over the next 18 to 24 months, Ericsson said it expects significant growth in patent revenue.
Ericsson is hoping that newer markets like India will help it offset some of the lower demand for 5G equipment despite the slowdown in the United States and other markets.
In a statement, Chief Executive Officer Borje Ekholm stated, “The growth from share gains in several markets could not fully compensate for reduced operator capex and inventory reductions in other markets, including North America.”
Due primarily to a shift in the business mix in its Networks division, gross margin decreased to 41.4 percent from 43.2%.
