The 10-second takeaway
For the quarter ended June 30 (Q2), Ericsson met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue shrank and GAAP earnings per share dropped significantly.
Margins contracted across the board.
Ericsson booked revenue of $8.00 billion. The 25 analysts polled by S&P Capital IQ anticipated sales of $7.93 billion on the same basis. GAAP reported sales were 7.9% lower than the prior-year quarter's $8.69 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.11. The 15 earnings estimates compiled by S&P Capital IQ predicted $0.11 per share. GAAP EPS of $0.05 for Q2 were 67% lower than the prior-year quarter's $0.15 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 32.7%, 560 basis points worse than the prior-year quarter. Operating margin was 6.5%, 580 basis points worse than the prior-year quarter. Net margin was 2.0%, 370 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $8.05 billion. On the bottom line, the average EPS estimate is $0.13.
Next year's average estimate for revenue is $33.30 billion. The average EPS estimate is $0.58.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Ericsson is outperform, with an average price target of $10.65.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.