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Ericsson Posts First Net Loss in Four Years as Demand Wanes

  • Company will implement further cost saving measures, CEO says
  • Bernstein: ‘Bloated costs, dysfunctions, empty CEO seat’

Ericsson AB reported its first loss in almost four years, wrapping up a disastrous third quarter that cratered the stock last week when the Swedish maker of wireless equipment reported preliminary figures.

The net loss totaled 233 million kronor ($26 million), the company said in a statement Friday. The average analyst estimate was for a loss of 112 million kronor. Ericsson surprised investors last week, reporting a 14 percent drop in third-quarter sales, and warning that its full results would significantly trail its forecasts.

Ericsson, which ousted its chief executive officer in July, has been muddling through an industry slump that’s cut deeper than it expected as competition from China exacerbated a cyclical downturn. That’s tested the patience of investors -- the stock, down 49 percent this year already, dropped another 5 percent on Friday. After the latest shock, Moody’s Investors Service downgraded its debt and the company has yet to find a new CEO.

“Ericsson suffers from a bloated cost base, major dysfunctions and an empty CEO seat,” Pierre Ferragu, an analyst at Bernstein, said in a note to clients. However, the company’s...