Economy Ericsson announced its results for the third quarter will be much weaker than expected shocked the market – share plummet in the stock market. Now, flag telekombolagets management for additional savings. And analysts believe that a possible reversal is delayed for several years.
Daniel Djurberg, telekomanalytiker at Handelsbanken, says that the market for mobile networks is tough also on other markets than the Ericsson point out in the profit warning.
- In virtually all markets fall freely on the Networks. So my view is that there will be a couple of tough years. We’ll see how it gets with dividends and the other, ” he says.
the Cause of this morning’s profit warning is that the development on the market has been even weaker than what Ericsson flagged for in connection with the last interim report, the outcome of which as a result has been significantly lower than expected.
After the second quarter are counted Ericsson with the negative sales trend and marketing mix would continue in the second half of the year.
- But what we see now is that this negative industritrenderna has accelerated even further, ” says Ericsson’s acting ceo Jan Frykhammar during a conference call.
Areas
the problem areas are, above all, Brazil, Russia and parts of the Middle east, according to Frykhammar.
- It is the same cluster of countries that we talked about in the report for the second quarter. But the decline has deepened in these countries.
On the question of whether further austerity measures are now necessary answers Jan Frykhammar first to Ericsson now focuses on implementing the cutbacks that have been presented in the past.
- But since we are in a situation where volumes are falling, so of course we must adjust the cost. It is clear, ” says Frykhammar.
- We can provide more details about this later, but that is a given.
Share plummeted
Ericsson’s share plummeted with the 16-18 percent while the stockholm stock exchange opened. The analysts were clearly surprised by this morning’s announcement.
- the Forecasts and the expectations that are set on the Ericsson before the report was low, really low. That would surprise on the negative side, it will come as a big surprise for me. Especially when it is so much, says: nordnet’s sparekonom Joakim Bornold, who followed Ericsson over a longer period of time.
Operating profit for the third quarter, landing tentatively on the 0.3 billion, compared with sek 5.1 billion in the corresponding period of last year.
the Inferior margin
Sales in Networks declined by a full 19 percent. In total, revenues amounted to 51,1 billion, compared to 59.2 billion crowns in the third quarter.
The for Ericsson key the gross margin decreased from 34% to 28%. According to the company’s expected current trends to be unchanged in the short term.
TT: What does it say here about the location of Ericsson?
- It is bad with Ericsson as a company, but it is also obviously a very, very tough market as you are in. It is not just that they lose their market share, but the entire market drops quite a bit. It is ominous, of course, and unfortunate that it seems to be in such a tough market right now, when you have so extremely much in-house to contend with, ” says Joakim Bornold.
Thousands may go
last week, Ericsson announced that about 3,000 jobs will disappear from Sweden. Production in Borås is added is likely down and even Kumla hit hard.
the Company is also without a permanent ceo since Hans Vestberg was fired in the summer.
On the question of whether Ericsson has no future as a company responds Joakim Bornold:
- Ericsson absolutely have a future, but it is highly uncertain whether it has a future as an independent company. Unfortunately, we come ever closer to a solution in which Ericsson may either be divided up, cut it up the company, or that someone else simply buy it up.
He sees a risk that it will require further austerity measures, in addition to those so far presented.
- We have probably not seen the worst than for Ericsson.
The figures now presented are preliminary – the complete quarterly report will be on October 21.
Later in the morning, Ericsson shall comment on the profit warning during a conference call.
Facts: Ericsson’s trouble
industry analysts have highlighted several factors behind Ericsson’s crisis. The company’s organization has after failure, the technological development is rushing away and the competition is cut-throat.
Ericsson’s core business is networking hardware. This segment is shrinking for some time now and the company has not managed to find any new revenue sources that can offset this.
the Company places great hope for the 5G, but experts question if it is the solution.
this will be the company lacks a permanent ceo after Hans Vestberg, who was fired in late July after a weak quarterly report. He had received harsh criticism, among other things, that he despite the crisis in the company been able to pick out big bonuses.
the recruitment process has been slow, and several big names have declined, reported Today’s Industry the other day.
Facts: Ericsson interim
Preliminary results for the third quarter, in sek billion. The report will be published on 21 October.
the 3rd Quarter, 2016 3rd Quarter, 2015 Sales 51,1 59,2 Gross profit Was 14.5 To 20.1 Operating profit of 0.3 to 5.1 -which Networks -0,3 2,8 Gross margin (per cent) to 28.3 33.9 to
Source: Ericsson
No comments:
Post a Comment