Ericsson’s woes were compounded in 2017 by a $1.8 billion write down and a $125 million tax bill from the US
Ericsson has posted a challenging set of full year financials for 2017, with reported sales decreasing by 10% compared with last year. The company’s gross operating margin also fell from 29.8% in2016 to 22.1% in 2017.
Ericsson was hit hard by a $1.8 billion write down of its debt, which pretty much decimated it’s Q4 2017 results.
The company was also hit hard by a $125 million tax bill, due to a change in US tax legislation, which was also booked into its Q4 results.
Ericsson has embarked on a comprehensive cost cutting campaign, which has seen the company make a number of efficiency based gains, as it attempts to turn the corner.
"We continued to execute on efficiency improvements with a net reduction of 10,000 employees and external workforce in the quarter. To date, the annual run-rate effect of cost savings is approximately SEK 6 b.(£540 million) compared with the target of SEK 10 b. (£900 million) for mid-2018. The impact on the results in the quarter [Q4 2017] is limited, but will be increasingly visible in the first half 2018," said Börje Ekholm, president and CEO of Ericsson.
Following the release of the full year financial report, Ericsson’s board of directors has recommended a dividend of SEK 1.00 (£0.09) per share.