Ericsson has cautioned that the financial performance of its core equipment business will likely worsen as it continues to battle to win back investors’ confidence after recent feeble performance and corruption investigations.
NewsTimes gathered that Ericsson’s shares fell 7% on Friday after it reported weaker-than-expected fourth-quarter results and projected that the profit margins of its networks business would continue to decline in the first half of 2023.
Andrew Gardiner, an analyst at Citi, said the announcement was a pointer to the significant challenges the company would face this year.
- “We view Ericsson’s outlook as one of the fundamentals deteriorating in the next quarter or two, as it aims to improve in the second half and beyond,” he added.
Ericsson’s controversies: Ericsson’s shares have halved since it revealed last year that it could have made payments to the Isis terror group in Iraq. It took a $220 million provision last week against a breach in its 2019 deferred prosecution agreement with the US Department of Justice, which came about due to corruption in countries including China, Indonesia, and Djibouti.
Replacement of former CEO: Ericsson also said last week that it would replace its under-fire chair Ronnie Leten, former chief executive of Electrolux, with Jan Carlson, a board member for the past six years and the current chair and former chief executive of Autoliv, a Swedish car components maker.