Ericsson reports fifth straight quarterly loss for Q4

01 Feb 2018

Ericsson has announced more restructuring moves after posting its fifth consecutive quarterly loss for the fourth quarter.

The struggling vendor reported a net loss for the quarter of 18.9 billion kronor ($2.39 billion), which compares to a 1.6 billion kronor loss in the same quarter a year earlier.

Net sales for the quarter fell 12% to 57.2 billion kronor, due in part to an anticipated decline in LTE sales from mainland China as the nationwide rollouts conclude.

Ericsson also took a 14.5 billion kronor write-down of assets during the quarter and recorded restructuring charges of 2.4 billion kronor.

The company's gross margin fell from 26.1% to 21%, but adjusted for restructuring charges and other items gross margin improved from 29.4% to 29.9%.

For the full year, Ericsson reported a 10% decrease in sales to 201.3 billion kronor as a result of declines across all segments and a full year loss of 25.1 billion kronor.

“During a challenging 2017, we have developed and started to execute on a focused strategy, strengthening our R&D while at the same time introducing robust measures to reduce cost and commercial risk. We have now laid the foundation for achieving our financial targets,” Ericsson CEO Börje Ekholm said.

“The fourth quarter was in line with our overall expectation, with gradual improving performance in Networks and continued significant losses in Digital Services. The result is however far below our long-term ambition.”

As part of its restructuring efforts, Ericsson has announced it has reached an agreement for One Equity Partners to take a majority 51% stake in the company's Media Solutions business.

Ericsson and One Equity Partners will form an independent company and will develop the business in line with a new business plan focused on becoming an independent video technology company.

Ericsson has also announced changes to its group structure and executive team, including the creation of a new Business Area Emerging Business that will be focused on innovation and new business development in areas including IoT and distributed cloud solutions.

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