Ericsson serves-up another massive write-down
![](https://www.waimaotong.com/template/new/image/time.png)
The purging of the Ericsson Augean stables continues with a $1.6 billion goodwill write-down. Will this be the last one?
The full write-down revealed by Ericsson amounts to SEK 14.2 billion, which equates to around $1.8 billion. The ordure is apportioned as follows:
Segment Digital Services: impairment of SEK 6.7 b. of goodwill and SEK 0.4 b. of intangible assets
Segment Other: impairment of SEK 6.0 b. of goodwill, SEK 0.3 b. of intangible assets, and SEK 0.4 b. of fixed assets
Segment Managed Services: impairment of SEK 0.3 b. of deferred costs related to termination of certain transformation activities
Segment Networks: impairment of SEK 0.2 b. of capitalized development expenses related to technologies that are no longer planned to be used
So it’s basically all Digital Services and Other’s fault. Digital Services is essentially cloud stuff and Other is mainly the problematic media division. Ericsson is keen to stress that ‘the majority of goodwill originates from investments made 10 years ago or more, and has limited relevance for Ericsson’s business going forward.’ Ultimately Ericsson is formally booking many of its diversification initiatives over the past decade as failures.
To be fair Ericsson did warn that its labours were not complete at its gloomy Capital Markets Day last November. CEO Ekholm seems determined to draw a line under the Vestberg era and start rebuilding from a solid platform. This is sensible but tests the nerve of investors as he continues to lower the floor for this platform. They seem to be taking this one in their stride, however, with Ericsson’s share price pretty much unaffected by the announcement.
Related News
- Ericsson earnings up 12% 2024-07-01
- Ericsson cuts 5,000 jobs as 2008 earnings drop 2024-07-01
- Ericsson profit drops 30 per cent 2024-07-01
- Ericsson Q1 profits slide by 30 per cent 2024-07-01
- Ericsson sees 63 per cent drop in Q2 profit 2024-07-01
- Ericsson holds steady despite loss on rollouts 2024-07-01
- Ericsson improves profit despite drop in sales 2024-07-01
- Ericsson serves-up another massive write-down 2024-07-01