Ericsson recovering but still posts Q1 loss

Ericsson has reported its sixth straight quarterly net loss for the first quarter, but the vendor significantly improved its performance year-on-year.

Ericsson posted a net loss of around 700 million kronor ($82.7 million), but this compared to a loss of 10 billion kronor in the first quarter of 2017.

The vendor’s operating loss was meanwhile reduced to 300 million kronor from 11.3 billion kronor.

Revenue for the quarter fell 9% year-on-year to 43.4 billion kronor, but adjusted for currency fluctuations revenue fell just 2%.

Gross margins meanwhile improved significantly to 34.2%, from 15.7% a year earlier and 21.6% during Q4.

During the quarter, Ericsson also cut its global workforce by a further 3,000 jobs, to take the number of positions eliminated since July up to 18,000.

Ericsson CEO Börje Ekholm said the results indicate that the vendor is making strong progress with its ongoing turnaround program. To date the annual run-rate effect of the cost reduction program is around 8.5 billion kronor, he said, which compares to a target of 10 billion kronor for mid-2018.

“We have continued to execute on our focused business strategy creating solutions that help our customers improve their business. Our efforts to improve efficiency in service delivery and common costs are starting to pay off,” he said.

“The improvements in the quarter are encouraging. However, more work remains to be done. We have confidence in the strategic direction laid out and remain fully committed to our long-term targets.”