Ericsson Earnings Estimated Miss. Stocks are falling.
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Ericsson shares fell more than 14% early Thursday after the Swedish telecom giant’s earnings fell short of expectations for the third quarter.
According to FactSet, the telecommunications equipment maker reported adjusted earnings per share of 1.56 Swedish crowns (14 cents), 10% below the year-ago period and below industry consensus. Analysts are 1.77 Swedish Crown.
The company said gross margin decreased from 44% to 41% as component costs increase and it invests more in maintaining supply chain resilience.
Ericsson (stock code: ERIC.B.Sweden) said that due to the inflationary environment, the company has made price adjustments and considered other ways to manage profits. “We are also simplifying operations across the company to be proactive in looking at options to reduce costs,” Chief Executive Officer Börje Ekholm said in a statement.
The company’s revenue rose 21% to 6.8 billion Swedish crowns, beating analyst estimates of 6.6 billion Swedish crowns.
Shares have fallen nearly 15% in early European trading, hitting their lowest level since March 2020. Shares are down more than 37% so far in 2022.
Write to Callum Keown at [email protected]