Ericsson shares drop as telecom equipment maker withdraws 2024 guidance

Shares of Ericsson fell as much as 9% in Stockholm trade as the Swedish telecommunications equipment maker withdrew its margin guidance for next year.

The company said it would not provide guidance beyond the fourth quarter.

“As timing for the market mix recovery is in our customers’ hands, we prudently plan for current market conditions to prevail into 2024. We are managing our business accordingly, with focus on cost management and operational efficiency. When the market recovers, we will have significant operating leverage following the actions we are taking,” the company said.

Ericsson
ERIC.B,
-8.48%

ERIC,
-0.21%
reported its third-quarter numbers after a warning it issued last week, when it said it would take a 32 billion krona ($2.93 billion) writedown on its acquisition of Vonage, which it bought last year for $6.2 billion.

It swung to a loss of 30.5 billion Swedish krona, on a 5% drop in sales to 64.5 billion krona, with the revenue missing estimates of 65.62 billion krona, according to Visible Alpha.

Its adjusted earnings before interest, tax and amortization margin was 7.3%, down from 11.3%, as it expects a fourth-quarter margin at “around 10%.”

Ericsson’s long-term margin target is between 15% and 18%.

Shares of Ericsson rival Nokia
NOKIA,
-3.96%

NOK,
+2.56%
dropped 4% in Helsinki.

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