Ericsson Grew Sales in the First Quarter

Ericsson had encouraging sales in its key markets and continued momentum in 5G in the first quarter of 2022. However, the company booked an 8% decline in net profit to SEK2.9 billion ($307.2 million). Revenue of SEK55.1 billion was up 11%. During the quarter, Ericsson booked a SEK900 million provision related to the suspension of business in Russia. Swedish vendor also recorded a loss of SEK300 million on the revaluation of assets held by its investment arm.

CEO Borje Ekholm noted the company had spent cash stockpiling various components in response to continued global supply chain issues in Q1 and expected this increased investment to continue in the coming months. Pointing to continued momentum in sales of network kits in the US, Europe, and Latin America he noted it had booked another solid quarter, adding there are some one-off effects this quarter, which is unfortunate, but happens in business.

Ekholm warned of the expected hit with financial penalties in the aftermath of revelations about activities in Iraq. He noted Ericsson was still engaging with the US Department of Justice (DoJ) over potential breaches related to a deferred prosecution agreement in the wake of the exposure of a well-publicized Iraq scandal.