Ericsson Announces Write Downs and US Tax Reform Charge
January 16 2018 - 2:29AM
Dow Jones News
By Dominic Chopping
STOCKHOLM--Ericsson AB will book a 14.2 billion Swedish kronor
($1.76 billion) writedown and a SEK1 billion U.S. tax charge in the
fourth quarter, it said Tuesday.
After completing impairment testing in conjunction with the
telecommunications-equipment company's new structure, Ericsson said
the impairments will hit fourth-quarter operating income mainly in
its digital-services unit.
"The adjustments have no influence on Ericsson's commitment to
executing its strategies and to investing in technology to support
customers' success," it said in a statement.
In addition, the recent cut to the U.S. corporate income tax
rate to 21% from 35%, which went into effect Jan. 1, has required a
revaluation of U.S. deferred tax assets. Ericsson said the current
estimated impact will be a noncash charge to the group income
statement of around SEK1 billion and will impact income-tax
expenses.
"The impairments and the tax asset revaluation will impact
reported net income in 4Q 2017, but have no impact on Ericsson's
cash flow and cash position in 4Q 2017," it said. "Ericsson's gross
and net cash position remain strong."
The figures announced Tuesday are unaudited, and final numbers
will be published in the company's fourth-quarter report, due to be
released on Jan. 31.
Write to Dominic Chopping at dominic.chopping@wsj.com; Twitter:
@domchopping @WSJNordics
(END) Dow Jones Newswires
January 16, 2018 03:14 ET (08:14 GMT)
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