On Friday, Ericsson shares plunged after it reported that most of its profitable markets were slowing down.
The telecommunications firm’s stock fell by 6.44% to $6.10 apiece on Thursday and it further dropped by 2.95% to $5.92 per share on December 16.
This plunged came after the company told its investors that it might hit the lower end of its target profit of 15.00% to 18.00% by the fiscal year 2024.
Moreover, the Sweden-based firm will slash the cost by $880.00 million in 2023.
Previously, Ericsson made a similar move and laid off thousands of employees before focusing on research.
Furthermore, the telecom firm’s CFO Carl Mellander stated that they had decreased the real state spending to reach a free cash flow margin of 9.00% to 12.00% in 2024.
Looking forward, the company expects the Indian market to balance the low demand for 5G equipment while the others such as the US were slowing down.
Accordingly, the Sweden-based telecom ended its battle over royalty payments for 5G patents after it struck a global deal with Apple last week.
Moreover, its CFO added that the company was focused on making its $6.20 billion acquisition of cloud communications firm Vonage a success.
US Govt to Monitor Ericsson for an Extra Year
The US government will monitor Ericsson for another year as part of the company’s compliance with its 2019 international bribery settlement.
The telecom firm admitted to the allegations that it made illegal payments to win business favors in five different countries.
Under the agreement, Ericsson will submit to audits and report wrongdoings to the US Justice Department.
However, the Sweden-based company has already violated the deal twice.
The first was when it hid information in October 2021, and the second was the time it bribed an Islamic State Terrorist in Iraq.
As a result, the scrutiny which was originally set to last three years was extended until June 2024.
Looking forward, Ericsson CEO Borje Ekholm stated that they will righteously conduct business to make things right.
