Ericsson drops to quarterly operating loss

Ericsson drops to quarterly operating loss

On Tuesday, mobile telecom equipment maker Ericsson suddenly tumbled to a quarterly operating loss, affected by shrinking markets as well as restructuring costs.

The Swedish company, currently focusing on its core networks business under new chief executive Borje Ekholm, posted an operating loss of about 12.3 billion Swedish crowns as previously announced writedowns, provisions as well as restructuring costs pushed it deep into the red.

The company’s stocks tumbled 2% in early trading.

Ericsson has been affected by a dip in spending by telecoms companies, with demand for next-generation 5G technology still years away as well as weak emerging markets. Moreover, it faces surging competition from such fierce rivals as Finland's Nokia and China's Huawei .

First-quarter sales hit 46.4 billion crowns, which is below the consensus forecast of 47.3 billion. Meanwhile, the gross margin turned to be 13.9% vs. the 17.9% seen by experts. 


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