Telefonaktiebolaget LM Ericsson (NASDAQ:ERIC) on July 19, 2016 reported its second quarter results 2016.
SECOND QUARTER HIGHLIGHTS
- Sales as reported decreased by -11% YoY. Sales, adjusted for comparable units and currency, decreased by -7% YoY. Mobile broadband sales continued to decline particularly in markets impacted by a weak macro-economic environment.
- Sales grew in South East Asia and Oceania. 4G sales in Mainland China and Networks sales in North America were stable.
- The current sales trends and business mix are expected to prevail for the second half of the year.
- Gross margin declined to 32.3% (33.2%) YoY, mainly due to a larger share of mobile broadband coverage business with lower hardware margins, and a higher share of services business.
- Operating margin decreased to 5.1% (5.9%) YoY, mainly due to negative revaluation effects of currency hedge contracts and a lower gross margin, partly offset by lower operating expenses and restructuring charges.
- Further actions are initiated to reduce cost, targeting a new annual run rate of operating expenses, excluding restructuring charges, of SEK 53 b. in the second half of 2017.
- Cash flow from operating activities was SEK -0.7 (3.1) b. Cash flow from operating activities for the first six months was SEK -3.1 (-2.8) b. Full-year cash conversion target of more than 70% remains.
Sales declined by -11% YoY. Sales, adjusted for comparable units and currency, declined by -7%. Mobile broadband sales continued to decline particularly in markets impacted by a weak macro-economic environment such as Brazil, Russia and the Middle East. In Europe, completion of mobile broadband projects in 2015 continued to have a negative effect on sales growth YoY. 4G sales in Mainland China were stable YoY as the fast pace of deployments continued.
Network sales in North America were stable YoY driven by continued mobile broadband capacity investments. Global Services sales declined in North America as activities in Professional Services were lower.
The transition from 3G to 4G continued primarily in parts of Asia, contributing to solid sales growth in region South East Asia and Oceania.
Shares of Telefonaktiebolaget LM Ericsson (NASDAQ:ERIC) fell -6.10% to reach at $7.08 during the course of session. The company has experienced volume of 11.98M shares while on average the company has a capacity of trading M shares. The stock holds the market capitalization of $22.73B along with 3.00B outstanding shares. The stock traded in the price range of $6.96 – $7.23 for the last trading session. For the stock price target value has been calculated at $7.76 based on calls of 9 experts. Stock’s minimum price target estimates has been figured out at $6.00 while the maximum price target forecast is established at $9.80.
Telefonaktiebolaget LM Ericsson (NASDAQ:ERIC) as of current trade, has shown weekly downbeat performance of -8.65%. Its six months performance indicated a bearish movement while its yearly performance reflected a negative trend of -32.49%. Year-to-date (YTD) performance of the stock illustrate downbeat trend of -23.08%. Shares of Telefonaktiebolaget LM Ericsson (NASDAQ:ERIC) currently have an ABR of 3.25, derived from a total of 8 opinions. The company’s price sits -7.17% below from its 50-day moving average of $7.61 and -% below from the stock’s 200-day moving average of $8.60. The company has Relative Strength Index (RSI 14) of 36.50 along with Average True Range (ATR 14) of 0.21. Its weekly and monthly volatility is 1.77%, 1.55% respectively. The company’s beta value is at 1.05.
Telefonaktiebolaget LM Ericsson (NASDAQ:ERIC)’s price to sales ratio for trailing twelve months is 0.82 and price to book ratio for most recent quarter is 1.35, whereas price to cash per share for the most recent quarter is 3.31. The company’s price to free cash flow for trailing twelve months is 180.32. Its quick ratio for most recent quarter is 1.90 along with current ratio for most recent quarter of 2.30. Total debt to equity ratio of the company for most recent quarter is 0.17 whereas long term debt to equity ratio for most recent quarter is 0.15. The company has a Return on Assets of 5.10%. The company currently has a Return on Equity of 10.10% and Return on Investment of 9.10%.