Ericsson faces restructure impairment charge - Mobile World Live

Ericsson faces restructure impairment charge

08 DEC 2017

Ericsson announced it may have to book an impairment charge for its Digital Services and Other segments to balance the books following a corporate restructure earlier this year.

In a statement, the Sweden-based vendor noted an impairment is not a reflection of its business performance in Q4 and the charge would hit operating income and equity rather than impacting cash flow.

“Our gross and net cash positions are strong, and will not be impacted by a potential impairment,” the company stated.

Ericsson said it will share the amount of any impairment in early to mid-January 2018 after the close of the fourth quarter.

Restated financials show Ericsson posted an operating loss of SEK18.37 billion ($2.1 billion) during the first three quarters of 2017, with an SEK15.2 billion loss in Digital Services, SEK2.9 billion for Managed Services and SEK6.1 billion in its Other unit. Its Networks business was the only positive, generating operating income of SEK6 billion.

Ericsson unveiled its new structure at its Capital Markets Day in November. At the time, CEO Borje Ekholm noted the vendor was pushing a software focus in its Digital Services unit, investing more heavily in its footprint in China and reviewing unprofitable managed services contracts to help the company return to growth.

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Diana Goovaerts

Diana joins Mobile World Live as its new US Editor, reporting on infrastructure and spectrum rollouts, regulatory issues, and other carrier news from the US market. Diana comes to GSMA from her former role as Editor of Wireless Week and...

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