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Ericsson Shares Fall On Missing Q2 Earnings; Notes Margin Expansion, Forges $8.3B 5G Deal With Verizon

Ericsson Shares Fall On Missing Q2 Earnings; Notes Margin Expansion, Forges $8.3B 5G Deal With Verizon
  • Telefonaktiebolaget LM Ericsson (NASDAQ: ERICinked a multi-year agreement worth $8.3 billion with Verizon Communications Inc (NYSE: VZ) to provide its 5G solutions to accelerate Verizon's deployment of 5G network in the U.S.
  • Ericsson plans to leverage Cloud RAN and our Street Macro solutions, adding depth and versatility to 5G network rollouts across the U.S. under the arrangement.
  • Verizon will deploy Ericsson's 5G MIMO C-band, low-band, and millimeter wave (mmWave) solutions to enhance and expand Verizon's 5G Ultra Wideband coverage, network performance, and user experience.
  • Additionally, Ericsson reported second-quarter FY21 revenue of $6.53 billion, missing analyst consensus of $6.67 billion.
  • Group organic sales grew by 8% Y/Y.
  • Organic sales in Networks rose 11% Y/Y, and Digital Services were stable Y/Y.
  • It reported an EPS of $0.14, missing analyst consensus of $0.15.
  • The adjusted gross margin expanded 520 basis points to 43.4%, driven by operational leverage in Networks.
  • The adjusted EBIT margin expanded 240 basis points to 10.6%.
  • The company raised the RAN market outlook for 2021 from 3% YoY growth to 10%.
  • Price action: ERIC shares traded lower by 8.68% at $12.10 in the premarket session on the last check Friday.

Related Articles (ERIC + VZ)

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