Ericsson is the first of the stock market heavyweights to release its quarterly report.
Sales were weighed down by SEK 7.8 billion due to negative currency effects - a large part of Ericsson's revenue is in US dollars. Profit was also squeezed by SEK 2.2 billion due to a stronger krona. Otherwise, it was a strong quarter, according to Narvinger.
We see growth in all our segments, even in three of four market areas, he says in a TT interview.
Savings packages cost billions
The company's underlying profit (according to the so-called adjusted EBITA measure) ended up at SEK 5.6 billion, compared with analysts' forecasts of SEK 5.8 billion. The company's revenue, totaling SEK 49.3 billion, was also worse than expected. And in terms of profitability, the result was slightly worse than before.
In addition, Ericsson's large savings package costs money: SEK 3.8 billion has been set aside in the accounts for termination costs and the like. So after tax, the profit was a more modest SEK 900 million.
1,600 employees in Sweden will be laid off, as was announced earlier this year.
Narvinger is tight-lipped about how the negotiations are going. The savings are about becoming more efficient in a market that is not growing much, according to Narvinger.
Rising prices
But the engineering union thinks that the company is backing away from the future, that management is now cutting what will generate future revenue. Per Narvinger, of course, disagrees. It's about a restructuring.
We are in the middle of a technology cycle.
In the long term, Ericsson's management sees the AI boom creating good conditions for growth, where connectivity via Ericsson's networks and next-generation 6G will become increasingly important.
The war in the Middle East is having some impact, including higher shipping costs. But the strong growth in AI is having a larger effect and is currently driving higher prices. When more customers demand semiconductors, their prices rise, according to the deputy CEO of Ericsson, who is being tipped as the likely successor to current CEO Börje Ekholm, who has been in office for almost ten years.
How do you see that role?
I have been in my current role for just over a year. I am fully focused on the tasks I have.
The share price initially fell 4 percent when the Stockholm Stock Exchange opened, but then rebounded. The share has performed strongly this year and is up approximately 22 percent since the turn of the year.
