Ericsson CFO Steps Down
The vendor, which confirmed its third-quarter financials Thursday, announced that CFO Karl-Henrik Sundstrom has decided to step down immediately in the wake of the unexpectedly weak quarter. (See Ericsson Replaces CFO.)
Ericsson last week rushed out preliminary results indicating a 36 percent drop in net profit to SEK4 billion (US$619 million) and a decline in operating margin from 21.1 percent to 12.9 percent. That sent the stock plummeting as much as 30 percent. (See Profit Warning Slams Ericsson .)
Ericsson reiterated those results today, although it might take some small comfort in that its operating margin was actually 13 percent. (See Ericsson Q3 Profit Falls.)
Ericsson's stock price was down SEK0.34 (1.77%) at SEK18.84 in afternoon trading on the Stockholm exchange.
Sundstrom is being replaced by Hans Vestberg, head of Ericsson’s Global Services unit and executive vice president. Vestberg will also remain in those roles until a replacement is found.
Svanberg was quick to tell a conference call of investors and analysts that Sundstrom wasn't pushed, but chose to leave: "Karl came to me a couple of days ago and told me that he wanted to step down. I think we all feel he was disappointed with the quarterly results -- this was totally his own initiative. To the extent that we could have done better in forecasting... we share that responsibility, all of us, and ultimately me."
Svanberg also said that Ericsson expects the same sales mix of lower-margin new network buildouts, rather than network upgrades, to continue into next year. "We will continue to see, I would say for at least through Quarter 2... effects of a higher proportion of new rollouts," he said. "Q1 normal seasonality is a bit slower and we think we will still have probably somewhat lesser upgrades; Q1 could be a bit of a low point in this cycle, but it may be too early to say."
— Nicole Willing, Reporter, Light Reading