Telefonaktiebolaget LM Ericsson Stock Price, News & Analysis

Ericsson's recent report forecasts a global 5G consumer market worth USD 31 trillion by 2030, with USD 3.7 trillion projected earnings for communications service providers (CSPs). The report highlights that 40% of revenue will stem from enhanced video, AR, VR, and cloud gaming over 5G networks. Despite a decline in consumers' willingness to pay a premium for 5G from 20% to 10%, early adopters remain optimistic. CSPs could achieve a 34% increase in average revenue per user by proactively adopting 5G strategies, promoting significant revenue growth in the coming years.

On November 10, 2020, Ericsson announced revised long-term financial targets during its Capital Markets Day. The company aims for an EBITA margin of 15% - 18% and free cash flow of 9% - 12% of sales. For 2022, the operating margin target remains at 12% - 14%, with segment-specific adjustments: Networks raised to 16% - 18%, Digital Services decreased to 4% - 7%, and Managed Services increased to 9% - 11%. The company emphasizes growth in 5G and enterprise applications but acknowledges risks from geopolitical uncertainties affecting its business.

On November 2, 2020, Ericsson (NASDAQ: ERIC) completed its acquisition of Cradlepoint, a leader in Wireless WAN Edge solutions, for approximately USD 1 billion. This acquisition aims to enhance Ericsson's footprint in the growing 5G enterprise market. In 2019, Cradlepoint reported SEK 1.2 billion in sales with a 61% gross margin. However, Ericsson anticipates an operating margin decline of about 1% in 2021 and 2022, largely due to amortization costs. Cradlepoint will function as a standalone subsidiary, focusing on driving 5G services in enterprise connectivity.

Ericsson (NASDAQ: ERIC) is set to host its Capital Markets Day on November 10, 2020, from 3:00 PM to 7:00 PM CET. The event will be conducted online, featuring CEO Börje Ekholm and CFO Carl Mellander, among other executives. It aims to update stakeholders on Ericsson's strategy for achieving long-term value through technology leadership, particularly in the context of the transition to 5G. Key discussions will include strategy execution, R&D initiatives, and financial updates.

For registration and details, visit Ericsson's event page.

Ericsson reported strong third-quarter results with a 7% increase in sales adjusted for comparable units and currency, primarily due to 5G sales in Mainland China. Total sales reached SEK 57.5 billion, and gross margin improved to 43.1%. Operating income rose to SEK 8.6 billion, reflecting a notable recovery from losses in the prior year. Net income was SEK 5.6 billion, a significant turnaround from SEK -6.9 billion. Free cash flow was SEK 3.9 billion, showing a year-on-year improvement. The company remains confident in achieving its 2020 targets amidst ongoing global challenges.

Ericsson (NASDAQ: ERIC) will publish its financial report for Q3 2020 on October 21, 2020, at approximately 7:00 AM CEST. A conference call for analysts, investors, and journalists will follow at 9:00 AM CEST, featuring comments from President and CEO Börje Ekholm and CFO Carl Mellander. The financial report will be accessible on Ericsson's website, and a live audio webcast will be available. A replay of the conference call will be offered for a limited time after the event.

On September 18, 2020, Ericsson (NASDAQ: ERIC) announced the acquisition of Cradlepoint for an enterprise value of USD 1.1 billion. This strategic move aims to enhance Ericsson's presence in the growing 5G Enterprise sector, complementing its existing portfolio. Cradlepoint, a leader in Wireless Edge WAN solutions, reported sales of SEK 1.2 billion in 2019 with a gross margin of 61%. The transaction is expected to close by Q4 2020. However, Ericsson's operating margins may face a 1% decline in 2021 and 2022 due to acquisition-related amortization.

Ericsson (NASDAQ: ERIC) has successfully demonstrated the industry's first live C Band network in the US, achieving a peak cell capacity of 5.4 Gbps using 16-layer Multi-user MIMO technology. This innovation enhances spectral efficiency and is part of the company's 5G Distributed Innovation Network at its Plano, Texas facility. The C Band spectrum is crucial for mid-band 5G deployment, blending extended coverage and capacity, and an upcoming auction for additional bandwidth is highly anticipated. Ericsson is poised to support customers in deploying advanced 5G infrastructure.

On August 26, 2020, Ericsson announced a partnership with UNICEF to map school connectivity in 35 countries by 2023, as part of the Giga initiative. This initiative aims to provide internet access to every school globally, addressing the digital divide reinforced by the pandemic. Ericsson's multimillion-dollar commitment includes funding, data engineering, and real-time analysis of school connectivity data. With 360 million young people lacking internet access, this partnership aims to enhance learning opportunities and empower youth in the digital economy.