Breaking News

Ericsson (ERIC) Gears Up For Q3 Earnings: What's In Store?

By Zacks Investment ResearchOct 15, 2019 08:44AM ET
Ericsson (ERIC) Gears Up For Q3 Earnings: What's In Store?
By Zacks Investment Research   |  Oct 15, 2019 08:44AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items

Ericsson (BS:ERICAs) (NASDAQ:ERIC) is scheduled to report third-quarter 2019 results before the opening bell on Oct 17. In the last reported quarter, the company missed the Zacks Consensus Estimate for earnings by a penny. Ericsson delivered a trailing four-quarter average positive earnings surprise of 24.1% despite missing estimates twice.

The Swedish telecom equipment maker is likely to report lower revenues on a year-over-year basis in the to-be-reported quarter due to fierce competition. It competes in a highly price-sensitive market, which has major presence of rivals like Nokia (HE:NOKIA) and Huawei.

Factors to Influence Results

During the third quarter, Ericsson witnessed a strong momentum in its 5G business with new contracts and commercial launches as well as live networks. Ericsson is currently live with commercial 5G in 19 customer networks across 15 countries, spanning four continents. The company in concert with RCS & RDS (DIGI) — the Romanian business unit of Digi Communications N.V. — introduced Romania’s first 5G commercial service in the busiest areas of Bucharest.

In partnership with Vodafone Group (LON:VOD) Plc, Ericsson introduced Vodafone U.K.’s 5G service with unlimited data plans for consumers and business customers. The move emphasizes Ericsson’s sustained focus on working closely with communication service providers in a bid to drive 5G in Europe.

On Sep 25, 2019, Ericsson communicated that its third-quarter 2019 results will be impacted by a 12 billion Swedish krona provision. This is due to a possibility of unfavorable outcome of the ongoing investigations by U.S. authorities into its business ethics breaches in six countries — China, Djibouti, Indonesia, Kuwait, Saudi Arabia and Vietnam.

The Zacks Consensus Estimate for total revenues is pegged at $5,903 million. The company reported $6,418 million in the year-ago quarter. Consequently, adjusted earnings per share are pegged at 8 cents. Adjusted earnings reported a year ago were 12 cents.

What Our Model Says

Our proven model does not show that Ericsson is likely to beat earnings estimates this quarter as it does not possess one of the two key components. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here as you’ll see below:

Earnings ESP: Ericsson’s Earnings ESP, which represents the difference between the Most Accurate Estimate and Zacks Consensus Estimate, is -12.50% as the former is pegged at 7 cents and the latter at 8 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Ericsson Price and EPS Surprise

Zacks Rank: Ericsson currently has a Zacks Rank #3. Although this increases the predictive power of ESP, we need a positive ESP to make us reasonably confident of an earnings beat.

Note that we caution against stocks with a Zacks Rank #4 (Sell) or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing a negative estimate revisions momentum.

Stocks to Consider

Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:

AT&T Inc. (NYSE:T) is slated to release quarterly results on Oct 23. It has an Earnings ESP of +0.50% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Verizon Communications Inc. (NYSE:VZ) is scheduled to release results on Oct 25. The company has an Earnings ESP of +0.21% and carries a Zacks Rank #2.

Earnings ESP for The Procter & Gamble Company (NYSE:PG) is +0.60% and it carries a Zacks Rank of 2. The company is likely to report results on Oct 22.

Today's Best Stocks from Zacks

Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.

This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.

See their latest picks free >>

Ericsson (ERIC): Free Stock Analysis Report

AT&T Inc. (T): Free Stock Analysis Report

Verizon Communications Inc. (VZ): Free Stock Analysis Report

Procter & Gamble Company (The) (PG): Free Stock Analysis Report

Original post

Zacks Investment Research
Ericsson (ERIC) Gears Up For Q3 Earnings: What's In Store?
Ericsson (ERIC) Gears Up For Q3 Earnings: What's In Store?

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email