Image source: Ericsson (ADR).

What: Shares of Ericsson (ADR) (NASDAQ:ERIC) fell as much as 15% early Thursday after the company released weaker-than-expected first-quarter 2016 results.

So what: Quarterly revenue declined 2% year over year (down 1% at constant currency), to 52.2 billion Swedish Krona (SEK), or roughly $6.425 billion. Based on International Financial Reporting Standards (IFRS), that translated to 45% growth in net income to 2.1 billion SEK (roughly $285.6 million), or 0.60 SEK ($0.07) per diluted share. On an adjusted (non-IFRS) basis, net income was 0.87 SEK ($0.11) per diluted share.

Analysts, on average, were more optimistic on both the top and bottom lines, with consensus estimates calling for adjusted earnings of $0.13 per share on revenue of $6.53 billion.

In short, Ericsson's top line was held back by a combination of increasing competition, macroeconomic weakness in emerging markets like the Middle East and Latin America, the end of last year's significant network build-out in Europe, and continued weakness in mobile broadband investments in Russia.

Now what: To help offset its continued revenue shortfalls, Ericsson also began to take additional cost-saving measures beyond its previously announced SEK 9 billion cost and efficiency program. As it stands, total restructuring charges for 2016 are now estimated to be in the range of SEK 4 billion to 5 billion, compared to previous guidance for SEK 3 billion to 4 billion. 

Though Ericsson CEO Hans Vestberg reminded investors that sales were "stable" after adjusting for comparable units and currencies, it's no surprise to see shares falling today considering the company not only fell short of expectations, but also increased its expected restructuring costs looking forward. So in the end, while it might be tempting to take advantage of today's drop should Ericsson's cost-cutting initiatives prove fruitful, I personally prefer to watch its progress from the sidelines for at least the next quarter before making any investment decisions.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.