The move is the first from its new CEO which is supposed to lead the Swedish telecoms equipment maker out of its worst crisis in a decade
Board member Borje Ekholm took over as CEO in January and the markets had been awaiting for his cunning plan to get out of the mess the company is in.
The firm is grappling with shrinking markets and fierce competition from China’s Huawei, Finland’s Nokia and the rise of the Ice Giants trying to cross the Bridge of Bifrost (we made the last one up).
The Swedish company said it would take $797 million-$1.02 billion in the first quarter related to recent negative developments in certain large customer projects. This has worried some analysts who fear that taking that much cash out of the bank might indicate the company is a bit borked.
The company will also write down assets in the first quarter, with an estimated impact on operating income of $342-$456 million, it said in a statement.
Ekholm said he expected his bottom line to be well and truly massaged and for significant improvements to be seen in 2018.
“Beyond that I am convinced that Ericsson, on a sustainable basis, can at least double the 2016 Group operating margin, excluding restructuring charges,” he said.