20 April 2018
| Alan Burkitt-Gray
Swedish telecoms equipment vendor Ericsson’s sales are down 25% quarter-on-quarter, and 9% year-on-year.
In the company’s latest quarterly results,
published today, Ericsson says its margin has increased from
15.7% in the first quarter of 2017 to 34.2% in the same quarter
this year. This is "tracking well towards our group target of
37-39% by 2020", said CEO Börje Ekholm in his
He continued: "In the quarter we reduced the total workforce by
more than 3,000. Since the reduction activities were launched
in July last year, we have reduced the total workforce by
Ericsson was once the unchallenged leader in the telecoms
equipment market. According to some reckonings, the Chinese
vendor Huawei has now passed it. Ericsson and Nokia, its sole
leading Western rival in the equipment market, are both tipped
to benefit from ZTE’s woes after the US
Department of Commerce put it on the banned list this
The annual run-rate effect of cost savings was 8.5 billion
kronor ($1 billion), compared with the company’s
target for the middle of this year of 10 billion kronor ($1.18
"The run-rate reduction does not yet fully impact the quarterly
results," he said.
Sales for the quarter were 43.4 billion kronor ($5.14 billion),
25% down on the fourth quarter of last year. Even adjusting for
currency changes, sales were 24% down, the company
But Ekholm was positive: "We have continued to execute on our
focused business strategy creating solutions that help our
customers improve their business. Our efforts to improve
efficiency in service delivery and common costs are starting to
He said: "The improvements in the quarter are encouraging.
However, more work remains to be done. We have confidence in
the strategic direction laid out and remain fully committed to
our long-term targets."