Ericsson warns of possible fine over Iraq scandal; earnings miss


  Last week, investors publicly rebuked Chief Executive Borje Ekholm and the board over the handling of the scandal that could expose the firm to yet another fine by the U.S. Department of Justice (DOJ).

  “The resolution of these matters could result in a range of actions by DOJ, and may likely include additional monetary payments,” Ekholm said in a statement, adding that it could not reliably estimate the size of the fine.

  The Swedish companys shares have fallen in the last two months after disclosure of an internal report about potential payments to the Islamic State militant group in Iraq.

  Quarterly adjusted operating earnings fell to 4.7 billion Swedish crowns ($497.44 million) from 5.3 billion a year ago.

  The mean forecast of 6.63 billion does not reflect a provision of 0.9 billion crowns related to Russia that was announced this week, according to Refinitiv data.

  However, the companys total quarterly revenue rose 11% to 55.1 billion crowns, beating estimates of 53.36 billion crowns.

  On Monday, Ericsson said it was indefinitely suspending its business in Russia over the invasion of Ukraine, with a $95-million provision in the first quarter for impairment of assets and other exceptional costs.

  It also said a 1-billion-crown annual software contract normally recorded in the first quarter was delayed into the next quarter.

  Excluding the provision and other charges, Ericssons core earnings amounted to 5.9 billion crowns.

  ($1=9.4483 Swedish crowns)


Be the first to comment

Leave a Reply

Your email address will not be published.