Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  Equities  >  NASDAQ OMX STOCKHOLM  >  Ericsson AB    ERIC B   SE0000108656

ERICSSON AB

(ERIC B)
  Report
SummaryQuotesChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisions 
SummaryMost relevantAll NewsPress ReleasesOfficial PublicationsSector newsMarketScreener StrategiesAnalyst Recommendations

Ericsson tops forecast on margin gains and 5G in China

10/21/2020 | 04:53am EST
FILE PHOTO:  A general view of an exterior of the Ericsson headquarters in Stockholm

STOCKHOLM (Reuters) - Telecoms equipment supplier Ericsson beat quarterly core earnings forecasts on Wednesday, helped by higher margins and China's 5G rollout, and said it was "more confident" about meeting its 2020 targets.

Ericsson shares jumped as much as 9% to a five year high as gross margins reached their best level since 2006 and revenues rose at the Swedish company's mainstay networks business despite disruptions caused by the COVID-19 pandemic.

The company has now won 112 5G contracts, up from 99 at the end of the second quarter, as more telecoms operators build next-generation networks and U.S. diplomatic pressure pushes out market leader Huawei from more countries.

But relations with China could become more fraught after Swedish authorities shut China's Huawei and ZTE out of its 5G network, citing security concerns.

Unlike Nordic rival Nokia, Ericsson has won contracts from all three major operators in China to supply radio equipment for 5G networks.

"The 5G roll out in China was the big driver in this quarter," Ericsson finance chief Carl Mellander told Reuters.

China's foreign ministry said on Wednesday Sweden should address its incorrect decision to ban Huawei and ZTE to avoid a negative impact on Swedish companies in China.

"We don't comment on different countries' decisions but in general we believe in free competition," Mellander said.

MARGINS LEAP

Ericsson's gross margin, excluding restructuring charges, rose to 43.2% in the third quarter from 37.8% a year earlier, reaching a level last seen in 2006.

"While the pandemic has hurt revenues for several of our customers, and in some cases this has led to a reduction of capex (capital spending), we have not seen any negative impact on our business, largely due to footprint gains," Chief Executive Borje Ekholm said in a statement.

Ekholm has driven a turnaround at Ericsson during his three years at the helm, improving margins amid growing demand for 5G equipment.

Third-quarter gains came mainly from the Networks division, which reported an adjusted operating margin of 22.7%, well above the forecast of 17.8%, Liberum analyst Janardan Menon said.

Adjusted operating earnings rose to 9.0 billion Swedish crowns (795.6 million pounds) from 6.5 billion a year earlier, beating analysts' mean forecast of 6.98 billion crowns, according to Refinitiv estimates.

Total revenue rose 1% to 57.5 billion crowns.

The adjusted operating margin now stands at 11.1% for January-September, compared with Ericsson's 2020 target of more than 10% and its goal of 12-14% for 2022.

Separately, the company announced a five-year, multibillion-crowns deal with Telia to upgrade its 4G networks across Sweden and Estonia.

(Reporting by Supantha Mukherjee and Helena Soderpalm; editing by Kim Coghill and Mark Potter)

By Helena Soderpalm and Supantha Mukherjee


© Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
ERICSSON AB -0.53% 104.05 Delayed Quote.28.25%
NOKIA OYJ -0.35% 3.3 Delayed Quote.0.47%
TELIA COMPANY AB -1.67% 35.43 Delayed Quote.-10.48%
ZTE CORPORATION -1.18% 35.06 End-of-day quote.-0.93%
All news about ERICSSON AB
12/01ERICSSON : brings 5G to Greece with WIND Hellas
PU
12/01TELEFONAKTIEBOLAGET LM ERICSSON : Ericsson-More than 1 billion people will have ..
AQ
11/30Britain bans new Huawei 5G kit installation from September 2021
RE
11/30Britain bans new Huawei 5G kit installation from September 2021
RE
11/30Telia to remove all Huawei equipment in Lithuania
RE
11/30ERICSSON : Sweden's Ericsson sees 220 million 5G subscriptions by year end
RE
11/25TELEFONAKTIEBOLAGET LM ERICSSON : VODAFONE NETWORK TAKES TO THE SKY TO ENSURE SA..
AQ
11/25ERICSSON : teams up with Chunghwa Telecom to connect Ørsted offshore wind farms
PU
11/24ERICSSON : Zlatan wins 12th Golden Ball in Sweden, Eriksson wins women's prize
RE
11/24TELEFONAKTIEBOLAGET LM ERICSSON : MTS and Polymetal to launch Russia's first com..
AQ
More news
Financials
Sales 2020 230 B 27 305 M 27 305 M
Net income 2020 15 421 M 1 828 M 1 828 M
Net cash 2020 20 164 M 2 391 M 2 391 M
P/E ratio 2020 22,5x
Yield 2020 1,50%
Capitalization 350 B 41 121 M 41 467 M
EV / Sales 2020 1,43x
EV / Sales 2021 1,33x
Nbr of Employees 99 826
Free-Float 89,0%
Chart ERICSSON AB
Duration : Period :
Ericsson AB Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends ERICSSON AB
Short TermMid-TermLong Term
TrendsNeutralBullishBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 24
Average target price 117,52 SEK
Last Close Price 104,60 SEK
Spread / Highest target 34,2%
Spread / Average Target 12,4%
Spread / Lowest Target -10,1%
EPS Revisions
Managers
NameTitle
Erik Börje Ekholm President, Chief Executive Officer & Director
Ronnie Leten Chairman
Carl Mellander CFO, Senior VP & Head-Group Function Finance
Erik Ekudden Chief Technology Officer & Senior Vice President
Torbjörn Nyman Director
Sector and Competitors
1st jan.Capitalization (M$)
ERICSSON AB28.25%41 121
CISCO SYSTEMS, INC.-9.22%185 458
FOXCONN INDUSTRIAL INTERNET CO., LTD.-24.08%42 540
MOTOROLA SOLUTIONS, INC.6.16%28 999
ZTE CORPORATION-0.93%22 800
NOKIA OYJ0.47%22 521