© Reuters. FILE PHOTO: A general view of an exterior of the Ericsson headquarters in Stockholm, Sweden, January 24, 2020. TT News Agency/Fredrik Sandberg via REUTERS/File photo
(Reuters) -Ericsson shares were volatile on Thursday, defying indications for a sharp fall after the Swedish telecom gear maker overnight announced a $2.9-billion impairment related to its acquisition of cloud communication firm Vonage last year.
Traders said investors were focusing on the company’s operational results, which were in line with market expectations.
JPMorgan pointed to a significant outperformance of Ericcson’s historically loss-making cloud software and services business, which turned to a surprise core profit in the third quarter.
“The earnings reported seems to indicate that the business is likely turning around due to the restructuring,” it said.
Ericsson (BS:) reported a preliminary third-quarter operating profit before amortisation, restructuring and impairment charges of 4.7 billion Swedish crowns ($431 million), down 39%.
The group, which announced in February plans to cut 8,500 jobs to reduce costs, said it expected an operating margin of 7.3% before amortisation and restructuring charges in line with previous guidance.
Ericsson shares were little changed by 0733 GMT, having traded between a rise of 2.2% and a fall of 2.4% on the day. The stock has lost around 13% in 2023.
($1 = 10.9010 Swedish crowns)
