Ericsson ADRs Fall Following 1Q Profit Miss on Delayed Contract, Russia Provision

By Maria Armental

Ericsson AB's ADRs fell 8% to $8.57 following an earnings' miss in the latest period driven by the suspension of operations in Russia and a contract delay.

The Swedish telecom-equipment maker also warned it faces a possible fine in the U.S. related to its handling of a corruption scandal in Iraq. The Justice Department has said the company's handling of the matter violated the terms of a 2019 settlement.

First-quarter profit fell to 2.94 billion Swedish kronor ($310.2 million), missing analysts' SEK4.07 billion forecast, according to FactSet.

Revenue, however, rose a better-than-expected 11% to SEK55.06 billion.

Earnings were weighed by a previously disclosed SEK900 million tied to Ericsson's suspension of its Russian business, as well as a SEK1 billion annual software contract that is normally recorded in the first quarter but has been delayed into the second quarter. The company also saw higher research-and-development and supply-chain costs, and noted lower licensing revenues due to the expiration of patent deals that are pending renewal.

-- Dominic Chopping contributed to this story.

Write to Maria Armental at [e-mail]

(END) Dow Jones Newswires

April 14, 2022 12:07 ET (16:07 GMT)

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