Ericsson revises margin guidance amid mobile networks sector uncertainty

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Ericsson revises margin guidance amid mobile networks sector uncertainty
Credit: © Reuters.

Ericsson (BS: ERICAs ) has announced a revision of its guidance for achieving a 15%-18% EBITA margin by 2024. The Swedish telecom company cited ongoing uncertainties in the mobile networks sector that are impacting customer investments as the reason behind this decision. This comes as no surprise as five analysts have revised their earnings downwards for the upcoming period, according to InvestingPro Tips. Nonetheless, Ericsson remains committed to its EBITA margin target under improved market conditions.

The company also pre-announced Q3 results, revealing a net loss of SEK30.67 billion ($2.81 billion). The substantial loss is primarily attributed to a SEK32 billion goodwill impairment in its Vonage business.

CEO Borje Ekholm provided insights into the company's future prospects. To mitigate the losses, Ericsson plans to implement cost-cutting measures that are projected to generate SEK12 billion in run rate savings.

Despite the challenging situation, Ericsson has been a consistent player in the market, maintaining dividend payments for 19 consecutive years as per InvestingPro Tips.

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