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Ericsson (Ba1/BBB-/BBB-) Announces Further Vonage Impairment; Not A Spread Mover

TECHNOLOGY


  • Ericsson one of the worse performing €IG equities on an announced second non-cash impairment of SEK 11.4bn attributed to slower-than-anticipated growth in their Vonage unit acquired in 2022.
  • Not a mover given this is non-cash and weak Vonage performance is not likely a spread mover given poor performance in the unit has been something of a theme and is evident in recent results (revenue -5% YoY in Q1 and -2% YoY in Q4, also just 7% of total revenue).
  • Outperformance against Nokia in the wake of earnings has petered out in recent weeks and has been flat since Nokia’s announced Infinera acquisition on Friday.

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