What Just Happened to Ericsson’s Stock Price?


Nov. 20 2020, Updated 4:26 p.m. ET

Ericsson’s falling shares

Shares of telecom equipment firm Ericsson (ERIC) fell ~10% in July 2017 to close the month at $6.42. Ericsson announced its 2Q17 results, and shares of the firm fell ~16% that same day. For 2Q17, Ericsson reported revenue of 49.9 billion SEK (Swedish kronor), representing a fall of 8% YoY (year-over-year) and a fall 13% YoY on a constant currency basis.

The firm also reported a GAAP (generally accepted accounting principles) net loss of $1 billion SEK of $120 million in 2Q17. Non-GAAP EPS (earnings per share) came in at $0.02—way below the analyst estimate of $0.05.

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Ericsson’s revenue expectations

Ericsson continues to battle weak macroeconomic conditions globally and will likely struggle to return to revenue growth anytime soon. Analysts expect the firm’s revenue to fall 6.2% YoY in 3Q17 to ~$5.6 billion and 9.3% YoY in 4Q17 to ~$6.9 billion. Analysts expect Ericsson’s revenue to fall 7.5% YoY to $24.1 billion in 2017.

Ericsson stock has fallen ~14% in the trailing 12-month period, after falling 37% last year. Peer companies Cisco Systems (CSCO), Juniper (JNPR), and Nokia (NOK) have generated returns of 3%, 23%, and 11%, respectively, in the trailing-12-month period.

Continue to the next part of this series for a look at Twitter.


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