Ericsson ADRs Fall Following 1Q Profit Miss on Delayed Contract, Russia Provision
15 April 2022 - 02:22AM
Dow Jones News
By Maria Armental
Ericsson AB's ADRs fell 8% to $8.57 following an earnings' miss
in the latest period driven by the suspension of operations in
Russia and a contract delay.
The Swedish telecom-equipment maker also warned it faces a
possible fine in the U.S. related to its handling of a corruption
scandal in Iraq. The Justice Department has said the company's
handling of the matter violated the terms of a 2019 settlement.
First-quarter profit fell to 2.94 billion Swedish kronor ($310.2
million), missing analysts' SEK4.07 billion forecast, according to
FactSet.
Revenue, however, rose a better-than-expected 11% to SEK55.06
billion.
Earnings were weighed by a previously disclosed SEK900 million
tied to Ericsson's suspension of its Russian business, as well as a
SEK1 billion annual software contract that is normally recorded in
the first quarter but has been delayed into the second quarter. The
company also saw higher research-and-development and supply-chain
costs, and noted lower licensing revenues due to the expiration of
patent deals that are pending renewal.
-- Dominic Chopping contributed to this story.
Write to Maria Armental at maria.armental@wsj.com
(END) Dow Jones Newswires
April 14, 2022 12:07 ET (16:07 GMT)
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