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Eurobites: Ericsson Restates Its Financials, Warns of Impairment Charges

Also in today's EMEA regional roundup: Vodafone abandons Maltese merger; Sheffield sticks the knife into Uber; Türk Telekom's TV ambitions.

  • As it said it would do earlier in the year, Ericsson AB (Nasdaq: ERIC) has restated its financials according to its four new reporting segments, which are Networks, Digital Services, Managed Services and Other. The vendor has today disclosed the restated financials for full years 2015 and 2016, and the first three quarters of 2017. Here are those restated numbers in full:

    Table 1:

    Net sales SEK million 2017 Q1 – Q3 2016 2015
    Networks 91,781 140,984 157,791
    Digital Services 28,116 45,298 49,443
    Managed Services 18,309 27,501 30,597
    Other 5,898 8,825 9,089
    Total 144,104 222,608 246,920
    Source: Ericsson

    Table 2:

    Operating income, reported SEK million 2017 Q1 – Q3 2016 2015
    Networks 6,017 17,570 28,290
    Digital Services -15,232 -6,663 -3,389
    Managed Services -2,972 -507 -19
    Other -6,183 -4,101 -3,077
    Total -18,370 6,299 21,805
    Source: Ericsson

    Table 3:

    Operating income, adjusted* SEK million 2017 Q1 – Q3 2016 2015
    Networks 12,992 20,983 31,055
    Digital Services -6,854 -3,487 -1,514
    Managed Services -752 -125 219
    Other -4,052 -3,505 -2,915
    Total 1,334 13,866 26,845
    * The numbers exclude restructuring charges and are adjusted for certain other items affecting comparability in 2017. Source: Ericsson

    Ericsson also warned of potential impairment charges in the Digital Services and Other segments, though it says these would not affect cash flow.

  • Vodafone Group plc (NYSE: VOD) has abandoned plans to merge its Maltese unit with Melita Group , saying that the two parties were unable to satisfy the requirements of the Maltese Competition Authority.

  • The northern English city of Sheffield has followed in the footsteps of London by refusing to renew the operating license of Uber, the app-powered cab-hailing company. As Reuters reports, Uber failed to respond to requests from the local authority regarding its management of the app. Uber claims the paperwork was sent to an incorrect address. The London case, meanwhile, heads to the courts next week. (See Uber Crashes Into UK Regulators, Loses London License.)

  • Türk Telekomunikasyon A.S. has its sights set on becoming the number one provider of TV in Turkey within the next five years, according to a Broadband TV News report citing Hurriyet Daily News. Its CEO, Paul Doany, says that the operator is well placed to rule the TV roost, having a fixed-line infrastructure that already covers 98% of Turkish homes.

    — Paul Rainford, Assistant Editor, Europe, Light Reading

  • kq4ym 12/28/2017 | 9:10:17 AM
    Re: Sense Good point. And I wonder how Turkish Communications will grow under the political ramifications going on in that country. With the turmoil and seeming instability one might wonder if they can use their dominance to keep that market in years to come or will some changes appear down the road?
    kq4ym 12/25/2017 | 9:04:42 AM
    Re: Sense One does wonder how to interpret the numbers and what it might really mean going forward. And how about Uber troubles...it may be dominoes falling as one after another problem arises. It's probably not much fun for their public relations department to keep up with the bad news arising.
    brooks7 12/8/2017 | 12:24:59 PM
    Re: Sense If you are talking about the difference between table 2 and table 3, then that is not a recast of the numbers.  The difference between those tables is essentially GAAP and non-GAAP reporting.  Lots of companies do this as part of their reports.  They exclude charges that are not part of the ongoing enterprise.  For example. the GAAP numbers would include severence package money where the non-GAAP would not.  The reasoning that these are often reported is that they are intended to give a more "accurate" view of the ongoing part of the organization.

    seven

     
    jerehada 12/8/2017 | 8:52:36 AM
    Sense Do those Ericsson numbers make sense? How can restating by segment materially improve operating income so drastically?
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