Sales and profits slide at Ericsson

(Sharecast News) - Sweden's Ericsson reported a slide in quarterly profits and sales on Tuesday, as wary customers cut back on spending. The telecoms equipment specialist reported a 17% drop sales in the final quarter of 2023, once adjusted for currency, to SEK71.9bn. Ericsson said the decline was driven by a 23% slide in networks, its biggest division, "as customers continued to focus on cash flow".

Earnings before interest fell 26% to SEK5.8bn, or by 9% to SEK7.4bn once restructuring charges and goodwill impairments were stripped out.

On a full-year basis, sales fell organically by 10% to SEK263.4bn while underlying EBIT was 34% lower at SEK18.1bn.

Borje Ekholm, chief executive, said the mobile networks market had been "very weak" in 2023, with conditions set to continue in the current year.

"We expect the market outside China to further decline, with similar uncertainties as experienced in 2023. In this environment we remain laser focused on managing elements within out control, including operational efficiency and tight cost management.

"We are confident in our strategy and are committed to driving long-term value for our shareholders."

He added: "We are confident that a market recovery should materialise. However, the timing of market recovery is ultimately in the hands of our customers."

Ericsson also named Lars Sandstrom as chief financial officer, who joins from Swedish medical technology specialist Getinge. Sandstrom will replace company veteran Carl Mellander, who announced plans to step down last year.