Ericsson: stock hit on heavy loss due to exceptional charge
(CercleFinance.com) - Ericsson has reported a heavy loss for Q3 on Tuesday, due to the recognition of an impairment charge linked to the acquisition of Vonage, a cloud specialist that it bought in 2022.
The Swedish network equipment supplier reported a net loss of 30.5bn SEK for the quarter (around E2.6bn), compared with a net profit of 5.4bn SEK a year ago.
Note that excluding provisions for goodwill, net profit would have been 1.4bn SEK.
Sales fell by 5% to 64.5bn SEK, including a 10% organic decline due to a 16% contraction in its networks business, while sales of its enterprise services and cloud divisions rose y-o-y.
As a result, the group's EBITA margin fell to 5.9%, compared with 11.2% a year earlier.
In its press release, Ericsson refers to a "difficult" market environment, and stresses that it expects economic uncertainties to persist until 2024.
While the Group maintains its forecast of an EBITA margin of 15% to 18% over the long term, it is less clear as to how this target will be achieved, saying that it wants to reach it as soon as possible.
In Stockholm, Ericsson shares were hit - down over 8% in early trading on Tuesday following this disappointing publication.
Copyright (c) 2023 CercleFinance.com. All rights reserved.
The Swedish network equipment supplier reported a net loss of 30.5bn SEK for the quarter (around E2.6bn), compared with a net profit of 5.4bn SEK a year ago.
Note that excluding provisions for goodwill, net profit would have been 1.4bn SEK.
Sales fell by 5% to 64.5bn SEK, including a 10% organic decline due to a 16% contraction in its networks business, while sales of its enterprise services and cloud divisions rose y-o-y.
As a result, the group's EBITA margin fell to 5.9%, compared with 11.2% a year earlier.
In its press release, Ericsson refers to a "difficult" market environment, and stresses that it expects economic uncertainties to persist until 2024.
While the Group maintains its forecast of an EBITA margin of 15% to 18% over the long term, it is less clear as to how this target will be achieved, saying that it wants to reach it as soon as possible.
In Stockholm, Ericsson shares were hit - down over 8% in early trading on Tuesday following this disappointing publication.
Copyright (c) 2023 CercleFinance.com. All rights reserved.