Ericsson posts first loss in four years

Wireless equipment and networking specialist Ericsson AB has reported its first loss in almost four years, after a horror third quarter that has smashed its share price.

The net loss, announced as US$26 million, is almost twice what some analysts had been expecting.

The company reported a 14% drop in third-quarter sales and warned that its full-year results would not meet its forecasts.

“Ericsson suffers from a bloated cost base, major dysfunctions and an empty CEO seat,” Pierre Ferragu, an analyst at Bernstein, said in an outlook note to clients. However, he added that the company’s position is nevertheless still strong.

Ericsson sacked its former CEO, Hans Vestberg, in July. Interim CEO Jan Frykhammar — who has stated that he doesn’t want the job permanently — said the company would be in even worse shape if it had not tackled its cost base “forcefully” at the end of 2014 and adopted further measures this year.

“As far as I know, the company is not for sale,” Frykhammar said in an interview on Bloomberg TV. “The company is very strongly supported by long-term owners.”