Ericsson's Poor Results Point to Struggle in Turning Around Its IT, Cloud Businesses

Ericsson AB Chief Executive Officer Borje Ekholm can't seem to catch a break, with his transformation plan showing signs of sputtering, a year in.After Ekholm ended unprofitable contracts, took writedowns and sought a potential sale of Ericsson's media business, investors had expected the Swedish maker of wireless networks would start showing more tangible signs of improvement.Instead, fourth-quarter results showed more evidence that Ericsson's primary business is weak and it's struggling to turn around a loss-making IT and cloud computing business. Sales missed analysts' estimates and Ericsson said it will hold onto 49 percent of its media business after finding a buyer for the rest. The shares fell as much as 8.6 percent, the most since Ericsson's profit warning in July.Ericsson employs about 3,000 people at its North American headquarters in Plano."Key as ever is networks and here Ericsson's performance is poor yet again," Neil Campling, an analyst at Mirabaud Securities Ltd. in London, said in an emailed note. Ericsson "may talk a good game of transition, transformation, improvement and a better future, but the numbers paint a clear picture that the core business remains weak and there is no evidence yet that the company can turn things around."  Continue reading...