Why Ericsson Stock Is Gaining Today

Ericsson ERIC shared its readiness to make a provision of SEK 2.3 billion ($220 million) about a possible resolution with the U.S. Department of Justice (DOJ) regarding non-criminal, alleged breaches under its 2019 Deferred Prosecution Agreement (DPA).
Ericsson will book this charge in its fourth quarter 2022 financial results.
Ericsson's internal investigation and cooperation with authorities regarding the 2019 Iraq-related internal investigation report remain open and ongoing.
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In 2019, Ericsson entered into the DPA to resolve past (before 2017) Foreign Corrupt Practices Act (FCPA) violations relating to misconduct in certain countries.
In October 2021 and March 2022, the DOJ notified Ericsson that it failed to provide documents and information to the DOJ promptly and did not adequately report certain information relating to a 2019 Iraq-related internal investigation.
The update indicates that a resolution is nearer than the market expected, which removes much of the overhang to the investment case, Danske Bank Credit Research analyst Mads Lindegaard Rosendal said, Reuters reports.
"The provision is significantly below both our and S&P's base case of about 10 billion SEK," he said.
Price Action: ERIC shares traded higher by 7.83% at $6.47 in the premarket on the last check Thursday.

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