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Published: January 23, 2024 5:08am ET
Telefonaktivora on Tuesday, after the Swedish telecoms giant Telefonaktivoraget LM Ericsson said it expected a slowdown in the global mobile network industry to continue to impact its sales in 2024. Get LM Ericsson’s stock price has fallen.
The Stockholm telco warned that market headwinds were likely to continue this year, blaming a 10% decline in full-year sales on a global slump in investment in mobile communications infrastructure.
stock…
Telefonaktivora on Tuesday, after the Swedish telecoms giant Telefonaktivoraget LM Ericsson said it expected a slowdown in the global mobile network industry to continue to impact its sales in 2024. Get LM Ericsson’s stock price has fallen.
The Stockholm telco warned that market headwinds were likely to continue this year, blaming a 10% decline in full-year sales on a global slump in investment in mobile communications infrastructure.
Ericsson stock
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It has fallen 2% in value over the past 12 months and was down 2% on Tuesday.
Ericsson said fourth-quarter network segment revenue fell 23% as customers were reluctant to invest in upgrading existing mobile infrastructure, with fourth-quarter revenue down 17% to 71.9 billion The amount was 6.9 billion Swedish krona ($6.9 billion).
Due to the company’s weak sales, full-year earnings before interest, taxes, depreciation and amortization (EBITDA) fell 27% year-on-year to SEK 21.4 billion, lower than 13 analysts expected. 25.7 billion SEK, according to FactSet data.
The Swedish multinational, founded in 1876, said it expects these difficult conditions to continue into 2024 as customers remain cautious in all markets except China. Stated.
The company warned that infrastructure spending in India is also starting to normalize following an investment boom driven by the rollout of 5G, which has so far strengthened its balance sheet.
However, Ericsson believes that current levels of investment in mobile infrastructure are unsustainably low for many operators and remains confident that investment levels will recover as demand for data traffic and 5G increases. said.
Nevertheless, the company said it is now preparing to boost profit margins through efficiency gains and cost reductions, while also benefiting from increased investment, and the timing of this recovery will ultimately depend on customers’ He said it was in his hands.
Ericsson CEO Berger Ekholm said: “While the initiatives we have taken to improve our performance are paying off, we are not satisfied with profitability and there is still more work to do.” .
Ericsson’s results follow AT&T’s results
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The decision to award a $14 billion contract to a Swedish company to build an OpenRAN network in the US was seen as a major blow to Finnish rival Nokia.
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Earlier this week, Barclays analysts warned that investment is likely to be constrained in all regions except China over the next three years, downgrading both Ericsson and Nokia.
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