Fri, Nov. 13, 3:49 PM
- A Swedish media report stating Cisco (CSCO -6%) is looking to buy mobile infrastructure/services giant Ericsson (ERIC - unchanged) led the latter's shares to briefly rise as much as 9.6% before giving back their gains. Markets are evidently skeptical.
- Worth noting: Cisco CEO Chuck Robbins just stated his company isn't looking to make large acquisitions. and is instead focusing on "small strategic" deals. Ericsson is currently worth $31B.
- Cisco and Ericsson are four days removed from announcing a comprehensive technology/reseller partnership. Ericsson will offer Cisco's switches/routers to mobile carriers in tandem with its own mobile infrastructure hardware and network services, Cisco will pair Ericsson's OSS/BSS network management software with its offerings, and the companies will form a "joint initiative focused on SDN/NFV and network management and control."
- Update: Cisco tells CNBC reports it's looking to buy Ericsson are "not true."
Tue, Nov. 10, 1:33 PM
- At its Capital Markets Day, Ericsson (ERIC -6.5%) forecast its total addressable market will see a 2%-4% CAGR from 2014-2018, below the 3%-5% CAGR it forecast for 2013-2017 a year ago.
- The network equipment market - Ericsson's equipment sales skew heavily towards mobile - is expected to see a 1%-3% CAGR, the telecom services market a 3%-5% CAGR, and the support solutions market a 7%-9% CAGR. Year-ago forecasts for 2013-2017 were respectively at 2%-4%, 4%-6%, and 7%-9%.
- Ericsson aims to outpace its addressable market's growth via investments in "targeted areas" such as cloud services, IP networking, TV/media equipment, and carrier OSS/BSS software. The company forecasts a 10% CAGR for targeted areas. On a trailing 12 month basis, revenue from targeted areas totals SEK45B ($5.2B), up from SEK35B a year ago.
- By 2020, Ericsson wants to get ~20%-25% of its revenue from non-carrier customers, up from ~10% in 2014. It also wants to get over 75% of its revenue from services and software, up from 66% in 2014. A restructuring that was announced last year and aims for SEK9B ($1.03B) in annual savings by 2017 is said to be on track.
- Rivals Nokia (NOK -2.7%) and Alcatel-Lucent (ALU -2.6%), set to become one company in 1H16, are also off. Ericsson's forecasts come a day after the company announced a major partnership with switch/router giant Cisco, a deal viewed in part as an attempt to counter Nokia/Alcatel. Cisco rival Juniper, long the subject of Ericsson M&A speculation, sold off in response.
- Ericsson press release, presentation slides
Tue, Nov. 10, 9:13 AM
Fri, Oct. 23, 5:43 PM
Fri, Oct. 23, 9:14 AM
Fri, Sep. 18, 5:40 PM
Thu, Sep. 10, 2:11 PM
- Ericsson (ERIC +1.1%) announced this morning it's buying Envivio, a provider of video processing hardware/software for delivering content to a variety of devices, for $55M.
- Ericsson, which has made a slew of acquisitions in recent years to lower its exposure to a slow-growing mobile infrastructure hardware market, plans to add Envivio to its TV and Media unit. In 2013, the company bought U.K. media/content service provider Red Bee Media, as well as Microsoft's Mediaroom IPTV infrastructure software unit. The year before that, the company bought Technicolor's broadcast services division.
- The deal appears to be fueling M&A hopes for Envivio rival Harmonic (NASDAQ:HLIT); Sidoti has upgraded the company to Buy. With a current $546M market cap, Harmonic would be a bigger fish to swallow.
Thu, Sep. 10, 8:09 AM| Thu, Sep. 10, 8:09 AM | 1 Comment
Fri, Jul. 10, 11:14 AM
- The Euro Stoxx 50 index is up 2.8% after Greece submitted a bailout proposal that met a number of the demands set by creditors for austerity measures and legal reforms. The Nasdaq is up 1.3%, and the S&P 500 1.1%.
- In addition to Nokia and Alcatel-Lucent (previously covered), major European tech gainers include SAP (SAP +3.7%), Ericsson (ERIC +3.6%), ASML (ASML +4%), and STMicroelectronics (STM +4.7%).
- Some SAP news: 1) CEO Bill McDermott has been discharged from a hospital after suffering an accident at his relatives' home. 2) A U.S. federal appeals court has upheld the cancellation of a patent owned by private Versata that led to a $391M infringement ruling against SAP.
- ASML reports on July 15, Ericsson on July 17, SAP on July 21, and STMicro on July 23.
Mon, Jul. 6, 2:42 PM
- Nokia (NOK -3.6%), Alcatel-Lucent (ALU -2.9%), Ericsson (ERIC -2.6%), and SAP (SAP -2.6%) are selling off after European markets dropped in the wake of a Greek rejection of austerity measures demanded by creditors. France's CAC-40 fell 1.8%, Germany's DAX fell 1.5%, and the Euro Stoxx 50 fell 2.2%. The Nasdaq and S&P are both down 0.8%. The euro is down 0.5% against the dollar.
- Something similar happened to Nokia and Alcatel a week ago. The merger partners are respectively down 11% and 10% from their June 22 closes.
Thu, Jun. 4, 11:13 AM
- A week after Citi upgraded Ericsson (NASDAQ:ERIC) on a belief U.S. wireless capex will improve, JPMorgan's Sandeep Deshpande has done the same.
- Deshpande, who now has an Overweight rating and $12.20 target, observes Ericsson's Q1 U.S. equipment revenue was near a cyclical low, and expects recent spectrum auctions to boost U.S. capex. "Additionally in early '16 high quality low frequency spectrum will be auctioned meaning a new capacity investment cycle should start in '16."
- He adds Ericsson's cost-cutting efforts should improve margins, and notes CEO Hans Vestberg recently stated industry consolidation should provide a margin lift.
Thu, May 28, 10:37 AM
- Citi's Ehud Gelblum, upgrading Ericsson (NASDAQ:ERIC) to Buy: "We believe the critical North America market is likely to start showing signs of life in the second half of the year, after remaining moribund for the past six quarters. We believe the recovery extends beyond H2 and continues into 2016 as operators are likely to deploy new equipment post the AWS-3 spectrum auction."
- With Ericsson (ERIC) having sold off hard last month due to a Q1 miss blamed partly on weak North American 4G spending, Gelblum thinks current levels could represent "a compelling entry point."
- He also argues cost cuts will help boost margins, that the Nokia/Alcatel-Lucent merger could allow Ericsson to gain share (others have argued the same), and that a resolution of Ericsson's patent battle against Apple would provide a bottom-line boost.
- The upgrade comes a day after Gelblum downplayed remarks from chairman Leif Johansson indicating Ericsson is open to making a big acquisition. "[A]fter speaking with the company and doing some thinking of our own, we do not believe there has been any change to ERIC’s thinking or approach to M&A. There had already been much speculation Ericsson will respond to Nokia/Alcatel by acquiring a wireline equipment vendor.
Fri, May 22, 4:10 PM
- A Florida federal judge has granted an Ericsson (NASDAQ:ERIC) motion for summary judgment on three 4G patents asserted by WiLAN (NASDAQ:WILN). Ericsson was ruled not to infringe two of the patents, and the third was deemed invalid. The trial for the related case has been cancelled.
- WiLAN says it's reviewing the decision with its trial counsel, and notes the counsel's preliminary view is that "there are grounds to appeal" the ruling to a federal appeals court (the CAFC).
- WiLAN fell to $2.02 in regular trading (its 52-week low). The company had sued both Ericsson and Alcatel-Lucent for infringing the aforementioned patents; Alcatel had settled.
Thu, Apr. 23, 9:13 AM
Mon, Apr. 13, 4:10 PM
- Sources tell Bloomberg Nokia (NYSE:NOK) might announce a deal to buy Alcatel-Lucent's (NYSE:ALU) wireless infrastructure hardware assets "as early as this week." Though a full-blown buyout of Alcatel has also reportedly been examined, a wireless deal "remains the most likely scenario."
- Nokia execs are reportedly working to win the French government's support. French government reps are said to be working on a compromise that would protect some domestic R&D jobs.
- Acquiring Alcatel's wireless unit (2014 sales of $5B) would yield cost synergies and increase Nokia's mobile infrastructure scale as it battles against market leader Ericsson (ERIC) and China's Huawei and ZTE. It would particularly strengthen Nokia's position in North America (Lucent's stronghold prior to the merger) and China. At the same time, the post-merger entity could lose share with carriers already relying on both Alcatel and Nokia, and wanting to maintain their current level of supplier diversity.
- For Alcatel, a sale would further lower the company's net debt load (a recent priority) and shed a business that has underperformed relative to Alcatel's IP routing unit.
- Alcatel closed up 7.9%. Nokia closed up 3%.
- Earlier: Nokia reportedly in talks to buy Alcatel-Lucent assets
Thu, Mar. 26, 12:19 PM
- As was widely expected, the FCC has voted to begin negotiations with Ericsson's (NASDAQ:ERIC) Telcordia unit regarding a major local phone number-porting contract, after relying on Neustar (NYSE:NSR) to provide the service for 18 years. Neustar has responded to the news by once more blasting the FCC's selection process, and affirming its guidance for 1H15.
- To soften the blow, the telecom data service provider has launched a $150M buyback that lasts until March 25, 2016. It's good for repurchasing 12% of shares at current levels. As of Dec. 31, Neustar had $329M in cash to pay for buybacks with, and $792M in debt.
LM Ericsson Telephone Company is a provider of communications technology and services. Its offerings include services, software and infrastructure in information and communications technology for telecom operators and other industries.
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