LM Ericsson: Earnings Preview

| About: LM Ericsson (ERIC)
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LM Ericsson Telephone CO ADS (NASDAQ:ERIC) is scheduled to report its third quarter and fiscal 2011 results on Wednesday October 20, 2011. The current Zacks Consensus Estimate for the quarter is 20 cents a share. For the quarter under review, revenue is $8,267 million, according to the Zacks Consensus Estimate.

Second-Quarter 2011, a Synopsis

Ericsson reported GAAP earnings of 58 cents per share from continuing operations for the second quarter of 2011, well above the Zacks Consensus Estimate of 22 cents.

Revenues in the quarter were up 14% on a year-over-year basis to SEK 54.8 billion ($48.0 billion) and were up 3% sequentially. Comparable sales after adjusting for currency effects increased 27% compared to the prior-year quarter.

Third-Quarter 2011 Zacks Consensus

The analysts considered by Zacks, expect Ericsson to post third-quarter 2011 earnings of 20 cents a share. The current Zacks Consensus Estimate reflects a decline of 8.7% from the prior-year quarter’s earnings. The current Zacks Consensus Estimate for the quarter ranges between 17 cents and 22 cents.

Zacks Agreement & Magnitude

Among the analysts following the stock, only 1 has raised its projection in the last 7 and 30 days, therefore, the Zacks Consensus Estimate is stagnant at 20 cents. In the last 7 days, only one analyst lowered his projection, keeping the Zacks Consensus Estimate unchanged.

Mixed Earnings Surprise History

With respect to earnings surprises, Ericsson has missed, met as well as topped the Zacks Consensus Estimate over the last four quarters in the range of negative 4.6% to positive 56.3%. The average remained at positive 25.3%. This suggests that Ericsson has beaten the Zacks Consensus Estimate by an average of 13.3% in the trailing four quarters.

Currently, we have a long-term Neutral rating on the stock. Ericsson holds a Zacks #3 Rank, which translates into a short-term Hold rating.