Ericsson 1Q Net Profit Missed Views on Delayed Contract, Russia Provision
14 April 2022 - 04:22PM
Dow Jones News
By Dominic Chopping
STOCKHOLM--Ericsson AB's first-quarter net profit missed
expectations because of a delayed contract, expiring licensing
deals and the previously announced 900 million Swedish kronor
($94.6 million) provision after suspending its Russian business,
the company said Thursday.
However, the company won market share in the quarter after
seeing strong sales of 5G equipment in North America, Europe and
Latin America, as overall sales of network equipment grew
organically by 4%, it said.
The Swedish telecommunications-equipment company reported net
profit attributable to shareholders of SEK2.94 billion, compared
with SEK3.17 billion a year earlier, as sales rose 11% to SEK55.06
billion.
Analysts polled by FactSet had expected net profit of SEK4.07
billion on sales of SEK54.14 billion.
Ericsson said the quarter was weighed on by a certain SEK1
billion annual software contract that is normally recorded in the
first quarter, but this year is delayed into the second quarter.
Higher research and development costs, the expiration of patent
deals that are pending renewal, and investments in supply chain
also had an impact, the company said.
"In light of the global supply chain challenges, we decided to
create a buffer of vital components in order to secure that we meet
customer delivery commitments," Chief Executive Borje Ekholm
said.
Ericsson now foresees the radio access network market growing by
5% this year, compared with 3% previously.
Write to Dominic Chopping at dominic.chopping@wsj.com
(END) Dow Jones Newswires
April 14, 2022 02:07 ET (06:07 GMT)
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