Tue, Jun. 21, 12:34 PM
- Even though "top-line trends" will continue to be tough this year thanks to weaker spending by telco customers, a battered stock price combined with higher profits thanks to cost-cutting makes for an upgrade to Neutral from Sell, says analyst Alexander Duval.
- His 2017 EBITDA estimate is now just 1% lower than consensus, suggesting less downside catalysts.
- As for this year, Duval sees an 8% decline in revenue vs. 2% consensus, but a story about major job cuts gives him hope of progress on costs by 2017.
- His price target of $8.50 compares to $7.90 previously, and the current price of $7.94.
- ERIC +1.5%
Fri, May 20, 5:39 PM
Thu, Apr. 21, 9:41 AM
- Ericsson (NASDAQ:ERIC) has tumbled 12.4% out of the open, after an earnings miss accompanied by a sweeping reorg.
- Three senior VPs are out as the company resets into five business units and a dedicated customer service division.
- Net profit was up 49%, while revenues dropped 2% (down 1% in constant currency). Gross margin fell to 33.3% from a year-ago 35.4%.
- Growth in North America, mainland China and southeast Asia was offset by weak development in Europe and some emerging markets, the company said.
- Revenue by segment: Networks, SEK25.8B (down 2%); Global Services, SEK23B (down 4%); Support Solutions, SEK3.4B (up 10%).
- Press Release
Thu, Apr. 21, 9:21 AM| Thu, Apr. 21, 9:21 AM
Fri, Mar. 18, 5:41 PM
Thu, Feb. 11, 4:03 PM
- SK Telecom (SKM -2.2%), South Korea's largest wireless carrier, is teaming with Ericsson (ERIC -0.9%) on a pilot system for a 5G network.
- SK had successfully demonstrated 5G network slicing last October, and teases that the commercialization of 5G will give them the ability to transmit "ultra-high data such as holograms and virtual reality that we cannot transfer in the current speed."
- The carrier is also working with Nokia on some core technologies for the network. South Korea's carriers have targeted a 2020 rollout for 5G networking, but would be happy to launch sooner if possible.
- Ericsson's also working with TeliaSonera on a 5G testbed for Sweden and Estonia.
Wed, Jan. 27, 9:22 AM
Fri, Jan. 22, 3:30 PM
- Plenty of tech names crushed over the first 20 days or so of January are sharply higher as the Nasdaq (up 2.4%) continues rebounding from Wednesday's intraday lows. Many still have sizable YTD losses.
- Big gainers among telecom equipment/component firms: Optical component vendors Oclaro (OCLR +9.5%) and NeoPhotonics (NPTN +6%), mobile infrastructure/services giant Ericsson (ERIC +6.2%), optical networking hardware vendor Infinera (INFN +5.2%), and microcap RF backhaul hardware firms DragonWave (DRWI +24.3%) and Ceragon (CRNT +10%). Ericsson underperformed yesterday following a pre-earnings Goldman downgrade.
- Among enterprise tech firms: Threat-prevention technology and services provider FireEye (FEYE +7.7%), big data software provider Hortonworks (HDP +16.1%), security software/services firm Rapid7 (RPD +9.1%), data governance software firm Varonis (VRNS +5.6%), and flash storage array vendor Violin Memory (VMEM +13.6%). FireEye fell slightly yesterday after making a Q4 pre-announcement and announcing a $200M+ acquisition. Hortonworks was crushed on Tuesday after a Q4 pre-announcement and stock offering shelf registration.
- Among chip industry firms: RF chipmaker Skyworks (SWKS +6%), audio codec developer Cirrus Logic (CRUS +7.3%), smart TV/home automation chipmaker Sigma Designs (SIGM +6.5%), FPGA/sensor hub maker QuickLogic (QUIK +9.2%), and chip equipment firms Axcelis (ACLS +4.9%) and Aixtron (AIXG +4.9%). Major Cirrus/Skyworks client Apple reports on Tuesday afternoon.
- Also up big: 3D printer maker 3D Systems (DDD +7.1%), Russian search leader Yandex (YNDX +7.5%), mortgage origination software firm Ellie Mae (ELLI +6.4%), Chinese solar firm Yingli (YGE +11.4%), and SMB Web services provider Wix.com (WIX +5.3%).
- Previously covered: Rosetta Stone, Live Ventures, HP Enterprise, Mitel, Mobileye, Qorvo, SunPower, SolarCity
Fri, Jan. 22, 10:29 AM
- TeliaSonera (OTCPK:TLSNY +2.7%) is working toward a launch of 5G networks in Sweden and Estonia by 2018, developing use cases along with Ericsson (ERIC +6%) for the next-gen network.
- The companies are working both on Internet of Things (Iot) applications as well as person-to-person communications.
- "Stockholm and Tallinn are two of the most connected cities in the world and now we'll take them to the next level," says TeliaSonera CEO Johan Dennelind.
- The companies pointed to e-health and connected cars as key applications for the new technologies, along with better network performance.
Fri, Jan. 15, 9:28 AM
- "With worse than expected revenue declines and high [emerging markets] risk, we expect no EPS growth in 2016," writes Deutsche's Johannes Schailer, downgrading Ericsson (NASDAQ:ERIC) to Hold. His target has been cut by SEK15 to SEK85 ($9.94).
- Schailer still sees Ericsson making progress towards a goal of SEK9B/year ($1.05B/year) in cost savings by 2017, but adds this is already reflected in his estimates and that "upside from further cuts in problem areas like IP routing seems unlikely for now despite the Cisco partnership." His 2016 EPS estimate has been cut by 4%; Schailer notes the cut would've been greater than 10% if not for the Apple settlement.
- Ericsson has dropped to $8.66 premarket. Nasdaq futures are down 2.7%, and the Euro Stoxx 50 index 2.1%.
Mon, Jan. 4, 5:39 PM
Dec. 21, 2015, 9:18 AM
Dec. 1, 2015, 5:34 PM
Dec. 1, 2015, 9:40 AM
- Credit Suisse's Kulbinder Garcha has upgraded Nokia (NOK +2.7%) and Alcatel-Lucent (ALU +2.4%) to Outperform ahead of the closing of their merger (set to occur in 1H16), and respectively hiked his targets to €9 ($9.54) and €4.95 ($5.25). Rival Ericsson (ERIC -1.7%) has been downgraded to Underperform, with its target cut to SKR75 ($8.65).
- Garcha expects Nokia/Alcatel to achieve significantly greater cost synergies than what management has forecast, as Nokia applies its "operational discipline" to Alcatel businesses. €1.7B/year worth of synergies are deemed possible by 2018 (guidance is for €900M), with €1.1B obtained by eliminating duplicate mobile infrastructure operating expenses and €480M by moving work to lower-cost regions. Altogether, he thinks the combined company's op. income (EBIT) could nearly double by 2018 to €4.3B.
- Regarding Ericsson, Garcha expects weak mobile infrastructure capex - he respectively forecasts 3% and 4% declines for 2016 and 2017 - to lead the company's revenue to drop 2% and 1% over the next two years. He also considers Street expectations for savings from cost-cutting efforts to be too high.
- Separately, Nokia has launched OZO, its 360-degree virtual reality camera array for professionals. Ozo, which will compete against a GoPro (NASDAQ:GPRO) VR array, sports eight cameras that each record at a 2K x 2K resolution, along with eight microphones and 500GB of storage. It's expected to ship in Q1, and will sell for a steep $60K.
- Last month: Ericsson slumps, takes Nokia/Alcatel with it after providing 2014-2018 growth outlook
Nov. 13, 2015, 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."
Nov. 10, 2015, 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.
LM Ericsson Telefon AB provides telecommunications equipment and related services to mobile and fixed network operators globally. The company operates through three segments: Networks, Global Services and Support Solutions. The Networks segment delivers products and solutions for mobile access,... More
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