LM Ericsson Telephone Misses on the Top and Bottom Lines

Updated

LM Ericsson Telephone (NAS: ERIC) reported earnings on Jan. 25. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), LM Ericsson Telephone missed on revenue and missed expectations on earnings per share.

Compared to the prior-year quarter, revenue dropped slightly, and GAAP earnings per share dropped.

Margins contracted across the board.

Revenue details
LM Ericsson Telephone booked revenue of $9.27 billion. The 23 analysts polled by S&P Capital IQ expected a top line of $9.80 billion. Sales were 0.7% lower than the prior-year quarter's $9.35 billion.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
Non-GAAP EPS came in at $0.05. The 16 earnings estimates compiled by S&P Capital IQ predicted $0.20 per share on the same basis. GAAP EPS of $0.05 for Q4 were 74% lower than the prior-year quarter's $0.20 per share.

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Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 31.0%, 560 basis points worse than the prior-year quarter. Operating margin was 7.5%, 560 basis points worse than the prior-year quarter. Net margin was 1.8%, 510 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $7.86 billion. On the bottom line, the average EPS estimate is $0.07.

Next year's average estimate for revenue is $34.92 billion. The average EPS estimate is $0.61.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 334 members out of 365 rating the stock outperform, and 31 members rating it underperform. Among 102 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 95 give LM Ericsson Telephone a green thumbs-up, and seven give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on LM Ericsson Telephone is outperform, with an average price target of $12.20.

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At the time thisarticle was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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