Ericsson Pushes Back 12% Operating Margin Target to Post 2020

By Adam Clark Features Dow Jones Newswires

Ericsson (ERIC) said Wednesday that its targeted 12% operating margin will take longer to reach than originally planned due to currency movements and some weak markets.

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The Swedish telecommunications company said it now aims to reach the margin target later than 2020, having said in March that it aimed to attain it after 2018.

Ericsson said this is due to the Swedish krona strengthening against the dollar, a weaker-than-expected radio-access-network equipment market and a challenging situation in its digital services unit.

The company said that its target for 2020 is now sales of between 190 billion Swedish kronor ($22.6 billion) and SEK200 billion, with an operating margin of at least 10%.

Ericsson said that the first results from its cost-reduction activities and contract reviews are already visible, and it is investing for the transition to 5G mobile networks.

Shares at 1351 GMT were down SEK0.25, or 0.5%, at SEK54.30.

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Write to Adam Clark at adam.clark@dowjones.com; @AdamDowJones

(END) Dow Jones Newswires

November 08, 2017 09:29 ET (14:29 GMT)