Ericsson Languishes under Russian Withdrawal and U.S. Penalty

Swedish telecommunications firm Ericsson has reported a drop in its first quarter revenue with a potential persistence of losses spurred by its recent suspension of operations in Russia for an indefinite period of time as well as a new penalty in the U.S. for violating sanctions.

According to Reuters, Ericsson CEO Börje Ekholm said in a statement that the company is facing a possible new fine from the U.S. Department of Justice for breaching the terms of a suspended prosecution settlement. He said, "The resolution of these matters could result in a range of actions by DOJ, and may likely include additional monetary payments, the magnitude of which cannot at this time be reliably estimated."

This was followed by a dip in the company’s total profits by 8% during the first quarter to 2.9 billion Swedish kronor ($308 million), falling well below its expected target of 4.8 billion kronor. This comes despite an 11% surge in in sales to 55.1 billion kronor.

Photo: Bloomberg