First, the Swedish telecommunications giant reported earnings of $0.04 per share (and per ADR) on $7.01 billion in net sales. That's a modest 3% revenue slip after adjusting for currency rate changes and hedging, but up 11% year over year for comparable units. Mr. Market didn't take kindly to that report, dropping Ericsson's shares like they were hot. Never mind that Ericsson remains a cash machine, growing operating cash flows by 7% year over year to $1.24 billion.
But on the heels of that uninspiring performance, Ericsson stepped up to the plate and beat down all comers in a high-stakes auction for the juiciest parts of bankrupt rival Nortel Networks
Nortel is still going to Europe, but to a very different set of open arms. The Nokia-Siemens deal would have created entirely new opportunities for the intrepid buyers, neither of which has much of a presence in the North American markets where Nortel stands strong. Ericsson is simply building on its existing strengths. I am not 100% sure that the Nortel-Ericsson deal will pass muster in antitrust proceedings, though bigger miracles certainly have happened.
Ericsson aims for a massive presence in the world's most exciting wireless markets. Recent multibillion-dollar contracts with both Verizon
So Ericsson turns its back on a bad quarter, sunk by big losses from joint ventures with electronics expert Sony
Fool contributor Anders Bylund holds no position in any of the companies discussed here. You can check out Anders' holdings or a concise bio if you like, and The Motley Fool is investors writing for investors.
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