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Ericsson restates financials for new segment reporting structure

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Ericsson restates financials for new segment reporting structure

Ericsson AB restated its financials for full year 2015, each 2016 quarter and the first three quarters of 2017 to reflect a new segment reporting structure as of the fourth quarter of 2017.

The new segments are Networks, Digital services, Managed Services and the Other segment, which includes products and services that allow content owners, broadcasters, TV service providers and network operators to deliver, manage and monetize new TV experiences. The segment also includes iconectiv and emerging business such as Internet of Things and Unified Delivery Network.

Also, the company said Dec. 8 that goodwill and acquisition-related intangible assets amounted to about 45 billion Swedish kronor in the balance sheet per third quarter of 2017. In the previous segment structure, 24.7 billion kronor is related to Networks, 11.6 billion kronor to IT & Cloud, and 8.6 billion kronor to the Other segment.

Further, the company reported net sales across the new segment reporting structure for the first three quarters of 2017 of 144.10 billion kronor, as compared to 222.61 billion kronor in 2016 and 246.92 billion kronor in 2015. Reported operating income for the first three quarters of 2017 was a loss of 18.37 billion kronor, compared to operating income of 6.30 billion kronor in 2016 and 21.81 billion kronor in 2015.

Adjusted operating income for first three quarters of this year totaled 1.33 billion kronor, compared to 13.87 billion kronor for 2016 and 26.85 billion kronor for 2015.

Ericsson is now working with the auditors to allocate goodwill and intangibles to segments. Thereafter the required impairment testing will be conducted, and its outcome will be announced shortly after the end of the fourth quarter.

The company expects the impairment to be required in segments Digital Services and Other, but not in segments Networks or Managed Services.

As of Dec. 7, US$1 was equivalent to 8.47 Swedish kronor.