Good growth, but unexpectedly weak profitability. And the extra dividend that many had hoped for did not come in the 2024 annual report from Ericsson.
After over an hour of trading on the Stockholm Stock Exchange, Ericsson's share has plummeted over 8 percent.
We are not on the long-term goal we have stated, says Ericsson CEO Börje Ekholm to TT.
"More to do"
The USA is the driving force when it comes to growth. And Ekholm believes we can soon put an end to a long downhill slope:
We need to get a market that also helps us, and then we have more to do around our own deliveries.
The sales increase in the fourth quarter comes, among other things, from a large agreement with operator AT&T in the USA, which gave a delivery boost during the second half of last year. It has also turned around in Europe, while it is pointing downwards in many parts of Asia and Latin America.
There are many strong parts. We are happy about that. But there is still more to do, says Ekholm.
A major challenge this year will be to handle what is expected to be new US tariffs, with President Donald Trump back in the White House.
So far, it's a bit speculative. We don't know what will happen. But it's clear that tariffs will affect. I think we have to assume that, says Ekholm.
According to Ekholm, Ericsson has been adapting to the new geopolitical situation for some time. Among other things, with a new factory in Texas and, most recently, a disputed Ericsson donation to Trump's inauguration in Washington.
"Europe is on its way to becoming a museum"
A 30-40-year era of globalization is, according to the Ericsson CEO, being replaced by an increasingly fragmented world economy, which is currently dominated by a race in technical development between the USA and China.
Now you have to focus on security and safety in supply chains: It's no longer just about costs.
Ekholm also warns that Europe has fallen behind, significantly:
Europe is on its way to becoming a museum. There will be no industry left.
The problem, according to Ekholm, is that regulations are prioritized over innovation and development of new products in the EU.
He notes that the new EU Commission seems to realize the problem, which he welcomes. But it's not just the politicians' fault, according to Ekholm.
We must take our own responsibility too. You can't blame the politicians. That's wrong. It's us as EU citizens who must take this responsibility. We must ourselves be involved and influence. That includes companies.
Telecom equipment manufacturer Ericsson reports an operating profit of SEK 7.96 billion for the fourth quarter of 2024. This can be compared to SEK 5.85 billion during the corresponding quarter a year earlier.
The adjusted operating profit increased to SEK 9.8 billion, up 33 percent. However, it was a bit below the average forecast among analysts of SEK 10.3 billion, according to the news agency Bloomberg.
The adjusted profit margin increased to 13.4 percent, compared to 10.3 percent a year earlier. But the market had expected over 14 percent.
Net sales for the fourth quarter increased by 1 percent to SEK 72.9 billion.
The dividend was increased to SEK 9.5 billion, up from SEK 9.0 billion a year earlier.
