Ericsson writes off $1.2 billion

Ericsson writes off $1.2 billion

LONDON – Telecommunications equipment supplier Ericsson AB has announced it will take a non-cash charge of about 8 billion krona (about $1.2 billion) in the fourth quarter of 2012, related to its 50 percent stake in the loss-making mobile chip company ST-Ericsson NV.

Ericsson said it had decided not to acquire a full majority of ST-Ericsson but that it would continue to explore strategic options for the joint venture. Co-owner STMicroelectronics recently announced its intention to exit from the venture by the end of 3Q13.

The charge reflects a write down of assets to reflect market value and includes about 3 billion krona (about $500 million) for the implementation of strategic options which Ericsson said it expects to be taken in 2013.

Ericsson said it continues to believe that the modem technology, which it originally contributed to the JV, has a strategic value for the wireless industry. It re-iterated that a priority of the process is a successful market introduction of LTE modems.


Related links and articles:

ST to exit ST-Ericsson in 2013

London Calling: Whither ST?

ST-Ericsson vows to keep working on turnaround

TAG:Ericsson ST Ericsson STMicroelectronics semiconductor IP mobile LTE modem