:max_bytes(150000):strip_icc():format(jpeg)/GettyImages-1946852610-3568f66bac264594a5c28b416477c61f.jpg "Ericsson headquarter in Stockholm, Sweden")
HENRIK MONTGOMERY / TT / TT Communication AGENCY / AFP via Getty Images
Key Takeaways
- U.S.-traded shares of Sweden’s Ericsson slumped 11% Friday when the telecom paraphernalia manufacturer warned possible Trump administration tariffs would significantly hurt its business.
- The company also missed earnings appraisals as expenses rose.
- Sales were strong in North America, but sank in most other regions.
American depositary vouchers (ADRs) of Ericsson (ERIC) sank 11% Friday when the telecom equipment maker missed profit believes and warned that potential tariffs from the Trump administration could seriously impact its future results.
The flock explained in its fourth-quarter earnings report that “the incoming U.S. administration has indicated that it intends to impose a broad break down of tariffs on imports to the U.S., which could have significant negative impacts throughout the information and telecommunications industry, encompassing the Company’s international product development and global value and supply chains.”
Ericsson also said that along with the U.S., it in opposition to grimaces “uncertainties for the future bilateral trading relationship between China and a number of countries,” including Sweden.
The company staked fourth-quarter earnings per share (EPS) of 1.44 Swedish kronor ($0.13), well below the SEK2.07 ($0.19) expected by analysts assessed by Visible Alpha. Revenue rose 1% year-over-year to SEK72.91 billion ($6.68 billion), mostly in line with forewarns.
Sales Surge in North America, Slump in Asia
North America sales soared 53% to SEK22.0 billion on wrinkle wins, increased network investments by some large customers, strong year-end software demand, and timing of activity deliverables. Sales were up 1% in Europe and Latin America, but they slumped in Southeast Asia, Oceania, and India (-28%), Northeast Asia (-22%), and Mid-point East and Africa (-19%).
Expenses increased SEK13.9 billion for Research and Development (R&D) and SEK10.5 billion for Selling & Administrative.
In the face today’s drop, Ericsson ADRs are up about 40% in the last year.
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