STOCKHOLM: Swedish telecommunications equipment maker Ericsson said Friday it suffered a net loss of 233 million kronor (24 million euros, $26 million) in the third quarter as operators slowed investments into mobile networks.
The company's shares had tumbled 20 percent earlier this month when it warned investors that the results would be considerably worse than the 3.1-billion kronor net profit it earned in the July to September period last year.
Ericsson shares fell another 4 percent in morning trading, touching levels last seen in 2012.
"The negative industry trends from the first half of 2016 have further accelerated, impacting Q3 sales, primarily relating to mobile broadband," chief executive Jan Frykhammar said in a statement.
He said the decline was particularly strong in regions with a weak macro-economic environment, pointing to Latin America, Middle East and Sub-Saharan Africa.
Furthermore current industry trends indicate a somewhat weaker than normal seasonal sales growth between the third and fourth quarters, the company added.
With sales dropping by 14 percent in the third quarter, Ericsson's operating margin decreased to just 0.7 percent from 8.6 percent one year ago.
The corporation is in the midst of a major overhaul, and earlier this month announced it was cutting 3,000 jobs in Sweden.
The company fired chief executive Hans Vestberg in July after seven years in the post, and is still looking for a permanent replacement.
During Vestberg's tenure, it struggled against competition from rivals Nokia, Siemens and Alcatel-Lucent and failed to make inroads in saturated and competitive markets such as Europe and North America.
Comments
Comments are closed.