Friday, 22 November 2019

Ericsson sales rise but earnings hit by corruption provision

STOCKHOLM: Ericsson reported rising sales, but the bottom line of the Swedish maker of telecommunications network equipment was hit as it set aside 1.1 billion euros to settle a US corruption probe.

The company, which is competing against China’s Huawei and Finland’s Nokia in supplying operators with the backbone of the latest generation mobile telephone networks, said sales of 5G equipment helped drive the 6 percent increase in overall sales in July through September from the same period last year.

“We continue to see strong momentum in our business, based on the strategy to increase our investments for technology leadership, including 5G,” chief executive Borje Ekholm said in a statement.

“We saw organic sales growth of 3 percent in the quarter, driven by the early adopters of 5G, in North America and North East Asia,” he added.

Organic sales restates figures to eliminate changes in exchange rates to help firms compare their performance between periods.

But the company reported a net loss of 6.2 billion kronor ($636 million, 575 million euros), compared to a profit of 2.7 billion kronor in the same period the previous year.

A 12 billion kronor provision that the company announced last month to cover the penalty Ericsson expects to receive in a US corruption investigation was responsible for the loss.

Ericsson has been cooperating since 2013 with an investigation by the US Securities and Exchange Commission (SEC) and, since 2015, with an investigation by the US Department of Justice.

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