Too Patient Capitalism
Ericsson Gets a Big Kick in the Pants
Ericsson needs some urgency, even from Cevian's "constructive" activists.
This article is for subscribers only.
Fixing messed up companies is hard and takes time. Shareholders in Ericsson AB were reminded of that on Tuesday when the Swedish company cautioned that demand for its telecoms gear would remain weak, and that more cost cuts were needed in its turnaround.
The shares tanked by 13 percent, reversing the gains made since Borje Ekholm took over as CEO in January. The selloff didn't look overdone. This is already Ekholm's second profit warning after all. Ericsson says the mobile equipment market will decline by a "high single digit" percentage, rather than the expected 2 to 6 percent decline.