Earlier this morning, telecommunications equipment vendor Ericsson announced 2019Q4 and 2019 full year financial results. Full year, sales were up 8% to SEK b. 210, which was up 4% adjusted for comparable units and currency. Full year, Net Income turned around with showing of SEK b. 1.8 profit, compared to a loss of SEK b. 6.8 the previous year.
The Kathrein antenna and filter business acquisition, and increased investments were the main reasons why Networks operating margin declined. “Operating income was impacted by increased operating expenses. The increase is related to the Kathrein business acquisition, increased investments in digitalization and added resources to strengthen security as well as our Ethics and Compliance program. For 2020 we expect somewhat higher operating expenses, which will not jeopardize our financial target.”
The Sprint / T-Mobile merger was pointed to as a reason for a sales slowdown: “Due to the uncertainty related to an announced operator merger, we saw a slowdown in our North American business in 4Q, resulting in North America having the lowest share of total sales for some time,” said Chief Executive Borje Ekholm.
Investors were disappointed with the results. At the time of the writing of this article (prior to the markets open in New York), Ericsson shares in Stockholm were down 6%, but had been down as much as 8%.
For more details on the announcement, see https://www.ericsson.com/assets/local/investors/documents/financial-reports-and-filings/interim-reports-archive/2019/12month19-en.pdf