Telefonaktiebolaget LM Ericsson Stock Price, News & Analysis

Ericsson (NASDAQ: ERIC) has updated its risk factors in light of the Swedish Post and Telecommunication Authority's decision to exclude Chinese vendors from the 5G auction. This decision may adversely affect the economic interests of Sweden and its industries, including Ericsson. The company's EMTN prospectus reflects increased geopolitical risks impacting its business and market share, particularly regarding its future trading relationship with China. The uncertainty surrounding bilateral trade could lead to potential restrictions on Ericsson's operations and sales.

Ericsson (NASDAQ: ERIC) has settled a damages claim with Nokia for EUR 80 million related to a 2019 resolution with the U.S. Department of Justice for violations of the Foreign Corrupt Practices Act in multiple countries. The settlement will impact EUR 80 million on EBIT and EUR 26 million on cash flow in Q2 2021, with further payments scheduled for 2022 and 2023. This reflects risks and uncertainties associated with prolonged litigation. Ericsson emphasizes its commitment to a zero-tolerance policy for corruption and enhancing its compliance program.

Ericsson (NASDAQ: ERIC) and Samsung have finalized a multi-year global patent license agreement affecting all cellular technologies, effective from January 1, 2021. This agreement resolves ongoing legal disputes and validates both companies’ patent portfolios. IPR licensing revenues for Ericsson are projected to be between SEK 2.0 billion and 2.5 billion in Q2 2021, influenced by various market factors and the transition from 4G to 5G. Ericsson’s extensive patent portfolio includes over 57,000 patents, supported by approximately SEK 40 billion in annual R&D investments.

Ericsson has launched its 5G-ready Wireless Office to target the USD 90 billion small and medium business (SMB) market in the US. This initiative aims to assist over 6 million companies, equating to 40% of the US workforce, as remote work becomes standard. The service streamlines IT management and enhances security, enabling secure access to applications and virtual desktops from any device. A strategic partnership with Telarus will bolster marketing efforts. The demand for flexible work solutions is rising, reflecting changes in workplace dynamics accelerated by the pandemic.

Ericsson reported a 10% year-on-year sales growth in Q1 2021, despite a SEK 1.6 billion drop in IPR licensing revenue. Reported sales stood at SEK 49.8 billion. The gross margin improved to 42.9%, with EBIT rising to SEK 5.3 billion. Networks sales increased by 15%, benefiting from market share gains. However, IPR licensing revenue plummeted to SEK 0.8 billion. Free cash flow before M&A was SEK 1.6 billion, down from SEK 2.3 billion the previous year.

On April 19, 2021, Ericsson (NASDAQ:ERIC) announced the formation of its Nomination Committee for the Annual General Meeting 2022. The committee includes Johan Forssell (Chair), Karl Åberg, Anders Oscarsson, Jonas Synnergren, and Ronnie Leten. Shareholders are invited to submit proposals to the committee prior to the meeting. The committee's role is to ensure a smooth governance process leading up to the AGM.

Ericsson (NASDAQ: ERIC) will publish its financial report for Q1 2021 on April 21, 2021, at approximately 7:00 AM CEST. The complete report will be available in PDF format on the company's website. Following the report's release, a live video webcast, featuring comments from President and CEO Börje Ekholm and CFO Carl Mellander, will take place at 9:00 AM CEST. Stakeholders are encouraged to participate and ask questions through designated phone numbers.

On March 30, 2021, Ericsson held its Annual General Meeting (AGM) under COVID-19 restrictions, allowing shareholders to vote only by post. The AGM approved a dividend of SEK 2.00 per share, with payments scheduled for April 8 and October 6, 2021. Key resolutions included the adoption of the financial statements for 2020, the discharge of the Board from liability, and the re-election of Board members. Additionally, a new Long-Term Variable Compensation Program was approved, potentially affecting 0.1% of outstanding shares.

On March 25, 2021, Ericsson (NASDAQ: ERIC) filed its Annual Report on Form 20-F for the fiscal year ended December 31, 2020 with the U.S. SEC. The report is accessible on their website, aiming to enhance transparency for investors. Shareholders can request a physical copy of the report. Ericsson continues to support communications service providers, facilitating digital transformation and operational efficiency. For more information, visit their investor relations page.