18 jul: Air China Ld Statement re results
18 jul: Polish State-Controlled Firms To Team Up for Nuclear Power - Repo..
18-07-2012 09:17:00

UPDATE: Ericsson Earnings Miss Views as Poor Margins Weigh

Relateret indhold
04 apr - 
Saxo Bank: Stærk Køb på Ericsson

--Ericsson disappoints with bigger than expected drop in net profit

--Earnings hit by low-margin contracts and weak demand in Europe, China

--U.S. sales remains strong

(Adds detail, analyst comment.)

By Gustav Sandstrom and Sven Grundberg

STOCKHOLM--Swedish network equipment vendor Ericsson (ERIC) Wednesday reported a bigger-than-expected drop in second-quarter earnings with profits stunted by a high number of low-margin sales in Europe and slow demand in some markets, but said it expects improvement towards the end of the year.

Ericsson's net profit fell 64% to 1.11 billion Swedish kronor ($159 million) from SEK3.12 billion in the same quarter last year, with the closely watched gross margin down to 32.0% from 37.8% a year ago. Analysts polled by Dow Jones Newswires had expected net profit of SEK1.67 billion and a gross margin of 33.3%.

The weak numbers mirror problems cited by French peer Alcatel-Lucent SA (ALU.FR) Tuesday, which said it will miss its forecasts this year due to thin margins on big contracts and sluggish demand in Europe.

Ericsson has managed to maintain its position as the world's biggest network equipment vendor throughout the global financial crisis, helped by its strong position in the fast-growing U.S. market. Still, the company's profits have been hit in past months by a high proportion of low-margin sales, and as a result of reluctance by telecom operators in Europe to invest in new gear amid the ongoing financial crisis.

Revenue from services, which typically have lower margins than sales of new network equipment, made up a larger part of Ericsson's sales mix in the second quarter. Profit also suffered as a result of a large number of low-margin contracts for network upgrades in Europe, that Ericsson has taken on to regain market share in the region.

"The negative gross margin impact from the network modernization projects in Europe will start to gradually decline end 2012," the company said in a statement

Net sales in the quarter were down to SEK55.32 billion from SEK54.77 billion the same quarter last year, against expectations for SEK54.5 billion.

Ericsson's global services and support solutions businesses saw strong demand, but networks sales fell from a year earlier, mainly due to slow sales of CDMA technology equipment, lower activity in China, and slow third-generation (3G) technology sales in Russia, the company said.

Ericsson repeated that operators in Europe have turned increasingly cautious, as a result of the deteriorating economic situation in the region. Sales in Western and Central Europe tumbled 6% in the quarter compared with a year earlier.

North America remained strong, however. Sales climbed 5% year-on-year and the region remained a bright spot as carriers such as AT&T (T), Sprint Nextel Corp. (S), Verizon Wireless and Deutsche Telecom AG's (DTE.XE) T-Mobile USA invest heavily in increasing third-generation wireless data capacity and building fourth-generation Long Term Evolution networks.

The investments in 4G capability in the U.S. is largely due to the rapid pick-up of phones and tablet PCs enabled with high speed wireless data functionality, such as Apple Inc.'s (AAPL) new iPad that the company launched in March this year.

Ericsson's shares are down around 16% so far this year, underperforming a 3.7% rise in the wider Stockholm market amid concerns that its closely-watched gross margin will remain subdued. The shares Tuesday closed at 58.90.

Write to Gustav Sandstrom at gustav.sandstrom@dowjones.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

(END) Dow Jones Newswires

July 18, 2012 03:17 ET (07:17 GMT)

Copyright (c) 2012 Dow Jones & Company, Inc.

Opret kommentar

Relateret debat

  • 1 uge
  • 1 måned
  • 1 År
Ingen indlæg

Novo/S&P Capital: Hæver kursmål til 273 kr. fra 253 kr.

30-10-2014 13:03:29
Analytikerne hos S&P Capital IQ er blevet mere positivt stemt over for Novo Nordisk-aktien.I hvert fald hæver finanshuset kursmålet til 273 kr. fra tidligere 25..

Aktier/åbning: Danske Bank og Novo fører an efter regnskaber

30-10-2014 09:14:46
To af de tunge spillere i eliteindekset C20, Danske Bank og Novo Nordisk, kom torsdag morgen med kvartalsregnskaber inden børsåbning.Og det er da også de to akt..

Novo/Sydbank: Levemir-tal gør frygt til skamme

30-10-2014 08:15:47
Det er et godkendt regnskab, Novo Nordisk har leveret torsdag morgen, både når det kommer til selskabets forventninger til 2015 og de nye præciserede forventnin..

Mest læste nyheder

  • 24 timer
  • 48 timer
  • 1 uge
1
Novo Q3: 2014-forventninger skuffer i forhold til konsensus
2
Novo/Sydbank: Levemir-tal gør frygt til skamme
3
Aktier/tendens: Novo fører an i regnskabsbølge
4
Vestas får genforhandlet 15-årig serviceaftale i Maine
5
Danske Q3: Opjusterer efter overraskende stærkt kvartal

Relaterede aktiekurser

Alcatel-Lucent 2,35 14,8% Stigning i aktiekurs
Alcatel-Lucent 2,92 13,9% Stigning i aktiekurs
Sprint Corporation 6,00 0,0% Aktiekurs uændret
Apple Inc 106,15 -1,1% Fald i aktiekurs
AT&T Inc 34,16 -0,7% Fald i aktiekurs
Ericsson Telefonab L M s.. 85,35 0,7% Stigning i aktiekurs
Ericsson- ADS each repre.. 11,64 0,8% Stigning i aktiekurs
Deutsche Telekom 11,50 -1,5% Fald i aktiekurs
Ericsson Telefonab L M s.. 9,30 0,0% Aktiekurs uændret

Køb- og salgsanbefalinger

  • Trend
  • Pengemaskinen

Relaterede selskaber
Få adgang til information og anbefalinger af relaterede selskaber med PLUS pakken.

Du får adgang til 7 værdifulde investorværktøjer til investering.

Klik her og læs mere om PLUS pakken.
Euroinvestor i andre lande: Euroinvestor.com | Euroinvestor.se | Euroinvestor.no | Euroinvestor.fr | Forexinvestor.com| Wisselkoersen.nl | Valuta.se | Valutaveksel.no | Divisas.es | Valute.it
Copyright Euroinvestor A/S 2014  Disclaimer Privatlivspolitik
Aktieinformation leveres af Interactive Data.
Data er forsinket 15-20 minutter iht. de enkelte børsers regler om videredistribution.
 
30. oktober 2014 16:09:05
(UTC+01:00) Brussels, Copenhagen, Madrid, Paris
Version: LiveBranchBuild_20141028.2 - EUROWEB7 - 2014-10-30 16:09:05 - 2014-10-30 16:09:05 - 1 - Website: OKAY

Når du besøger Euroinvestor.dk accepterer du, at der anvendes cookies, som vi og vores samarbejdspartnere benytter til funktionalitet, statistik og markedsføring. Læs mere om cookies på Euroinvestor.dk her

x