Ericsson posted disappointing first-quarter financial results relative to what was recently declared the world’s largest radio access network (RAN) equipment vendor, though those numbers only portend to the expected financial – or worse – hit the vendor is expecting from the U.S. government tied to ongoing corruption issues.

The first three months of 2022 have been a rollercoaster for Ericsson, and more specifically its executive team. It might have started the year being feted as the No. 1 RAN vendor, but it was quickly subsumed by shocking corruption charges that have now almost overshadowed what was a poorly executed operational quarter.

Ericsson recently admitted to multiple incidents of bribery and corruption by its operations in Iraq between 2011 and 2018. Most damning of all, the company said it can’t unequivocally deny that bribes paid by some employees during that period ended up in the hands of the Islamic State.

From a legal perspective, Ericsson CEO Börje Ekholm provided scant, though ominous, details on Ericsson’s potential total punishment.

“What I can say now is that it’s our assessment that the resolution will likely result in monetary and other measures,” Ekholm said during the vendor’s earnings call, according to a transcript. “However, the magnitude of these cannot, at this time, be reliably estimated. As this process is ongoing, we remain limited in what we can say about the historical events covered in the Iraq investigation and related matters.”

Also damning is that this latest incident comes on the heels of Ericsson already paying a $1.06 billion settlement it reached with the U.S. Department of Justice related to a 17-year period of criminal wrongdoing in six other countries.

Ericsson shareholders last month backed Ekholm’s continued leadership at the vendor, but did not let him off the hook for any future potential liability.

Ericsson’s overall Q1 numbers were relatively flat compared to the same quarter last year when the world was still deep in a COVID-19 depression, but down sequentially from the last quarter of 2021.

Company management tried to spin the results by repeatedly stating it was in the network of 16 of the world’s 20 largest mobile operators, but that made the fact it still couldn’t show any financial progress more damning.

Ericsson’s overall sales were all over the map – literally. Bright spots included North America, where sales increased 9% year over year. Ekholm touted further growth potential this year tied to carriers tapping into newly acquired C-Band spectrum to extend their 5G capacity.

Europe and Latin America also showed increased sales, which Ericsson noted was tied to market share gains. Much of this is connected to the ongoing marginalization of Chinese vendor Huawei as an approved equipment vendor in those regions.

However, sales in most other markets decreased year over year. The company cited more advanced markets as being in a deployment lull between initial 5G deployments and the need to ramp capacity for still-developing applications. While developing countries were still struggling the free up spectrum to support 5G services or were fleshing out their 4G LTE plans.

Ericsson’s enterprise business also continued to stumble. Despite spending an incredible $6.2 billion to acquire Vonage on top of a $1.1 billion it spent on Cradlepoint to bolster its position in a space that Ericsson CFO Carl Mellander admitted was a “fast-growing sector,” he could only add that the vendor was “obviously attracted” to the market.

“And as Börje said, we are certainly working and engaging with many, many enterprise sectors … to stimulate that demand and show what is possible with 5G,” Mellander said during the earnings call. “And we see great interest also from the enterprise side.”

Ericsson’s cloud-native ambitions have also yet to produce financial results. Ekholm explained that the vendor was investing in next-generation network drivers that sit in its Digital Services division, but that it has been unable to produce satisfactory results from those investments.

“We’re investing in cloud RAN, next-generation ASICs, as well as our cloud-native core portfolio and service orchestrations,” Ekholm said. “These investments in R&D will generate a strong return longer term, but it, of course, impacts the profitability short term as they are not yet revenue generating.”