By Dominic Chopping
STOCKHOLM–Ericsson AB on Friday posted lower-than-expected fourth-quarter web revenue and cautioned that the near-term outlook is unsure, with operators holding off inserting new orders as they rebalance inventories and assess financial headwinds.
The Swedish telecommunications-equipment firm mentioned these tendencies began to harm its key networks unit within the fourth quarter and that it expects them to proceed no less than through the first half of 2023.
Ericsson reported web revenue attributable to shareholders of 6.07 billion Swedish kronor ($588.2 million) in contrast with SEK10.08 billion a yr earlier, as gross sales rose 21% to SEK86.0 billion.
Analysts polled by FactSet had anticipated web revenue of SEK7.05 billion on gross sales of SEK84.78 billion.
The corporate expects to start out seeing the impact of its SEK9 billion cost-saving actions through the second quarter of 2023.
“We anticipate declining margins in networks through the first half of 2023 as a consequence of altering enterprise combine,” Chief Government Borje Ekholm mentioned.
“In 1Q we count on the earnings earlier than curiosity, tax and amortization for the group to be considerably decrease than Ebita final yr.”
Total gross sales of community gear grew by 15% on the yr, however margins have been weighed by a change to new development markets in south east Asia, Oceania and India, from greater margin front-runner markets reminiscent of North America.
Write to Dominic Chopping at dominic.chopping@wsj.com
