photo: Magnus Hjalmarsson Neideman
the loss amounts to about 20 billion of the company’s stock market value lost since the stock market opened after the report. The market capitalization yesterday was 260 billion, and the course appeared just after the opening by about 8 percent.
According to analysts, it is mainly the margin on Ericsson’s service to our Global Services business that is too weak for the market’s taste. Volumes are low, and many projects are in early stages and draws costs without Kunn pay anything back in a long time.
Ericsson reports a pretax profit of 3.0 billion for the first quarter of 2016. That compares with profit of 2.1 billion in the corresponding period of 2015.
the turnover amounted to 52.2 billion compared to 53.5 billion kronor a year earlier. Operating profit was SEK 3.5 billion, compared with 2.1 billion in the corresponding period of 2015.
Analysts had on average calculated that this result would land at about 4.4 billion crowns, according to Reuters. For sales forecast was cut approximately SEK 54.6 billion.
Both in Networks, Ericsson’s largest business, and Global Services, revenue fell. Now Stow Hans Vestberg the Group management, the future will consist of 16 people. Seven to come while the five leaves.
– Most vulnerable are Global Services and which moves the responsible manager. Gross margin is weak and the company does not seem to get started software sales. Sales are weak.
The case was still expected, according to Vestberg.
– It came a little sooner than we thought, if we are being honest, says Hans Vestberg at the press conference on the report.
But Global Services is still an important area for Ericsson.
– But it was a weak quarter, there is no doubt about that, said Vestberg.
Ericsson is still grappling with the several regions have problems with their finances, such as Russia, Brazil and the Middle East.
– Now we adjust capacity in these countries, said Vestberg.
Daniel Djurberg, , telecoms analyst at Handelsbanken, believes that the report is weak throughout.
– Most vulnerable are Global Services and which moves the responsible manager. Gross margin is weak and the company does not seem to get started software sales. Sales are weak, basically in all regions except North America and China.
According Animals Mountain is one of Ericsson’s problems, the company rolled out 4G network in 55-60 percent of all developed markets, but it does not pay as expected.
– the idea of the business model is to be able to live well on upgrades and software revenue from existing customers, but it does not seem to lift, as reflected in the gross margin.
He does not rule that the new savings could be greater than the billion Ericsson announcing in the report. Nor that there can be talk of more layoffs.
But in China and North America Demand is stable and good, while Europe is a little weaker.
– in Europe, the lower rate of new network rollouts currently.
According Animals Mountain is one of Ericsson’s problems, the company rolled out 4G network in 55-60 percent of all developed markets, but it does not pay as expected.
– the idea of the business model is to be able to live well on upgrades and software revenue from existing customers, but it does not seem to lift, as reflected in the gross margin.
He does not rule that the new savings could be greater than the billion Ericsson announcing in the report. Nor that there can be talk of more layoffs.
But in China and North America Demand is stable and good, while Europe is a little weaker.
– in Europe, the lower rate of new network rollouts currently.
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