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Benzinga
Benzinga
Business
Anusuya Lahiri

Ericsson Shares Drop Post Q1 Results; Acknowledges DOJ Penalty, Russia Business Suspension

  • Telefonaktiebolaget L M Ericsson (NASDAQ:ERIC)  reported a first-quarter FY22 sales growth of 11% year-on-year to SEK 55.1 billion.
  • Group organic sales grew by 3% Y/Y, driven by Networks in North America, Europe, and Latin America. 
  • Organic sales in Networks rose 4% Y/Y, and Digital Services sales down by 2% Y/Y.
  • It reported an EPS of SEK 0.88 versus SEK 0.96 last year.
  • Adjusted gross margin contracted 60 basis points to 42.3% due to investments in network supply chain resilience. 
  • Adjusted EBIT margin declined by 200 bps to 8.7%.
  • Ericsson saw strong business momentum, and its investments in technology and a resilient supply chain have allowed it to continue to win market share and deliver on customer commitments. 
  • Ericsson acknowledged the indefinite suspension of its business in Russia following current sanctions.
  • Ericsson saw an unspecified DOJ penalty due to its failure to make adequate disclosures about its operations in Iraq before entering a deferred prosecution agreement in 2019.
  • Price Action: ERIC shares traded lower by 6.30% at $8.77 in the premarket session on the last check Thursday.
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