Ericsson Beats Expectations but Takes a Step Back Anyway

Ericsson (NAS: ERIC) reported earnings on July 18. Here are the numbers you need to know.

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.

Revenue details
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.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
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.

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Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
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.

Looking ahead
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.

Investor sentiment

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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The article Ericsson Beats Expectations but Takes a Step Back Anyway originally appeared on Fool.com.

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.

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