Ericsson (ERIC) Stock Dips on Q2 Earnings Miss

Ericsson (ERIC) reported lower-than-expected 2016 second quarter earnings this morning.
By Rachel Aldrich ,

NEW YORK (TheStreet) -- Shares of Ericsson (ERIC) - Get Report  are down 7.21% to $7 at midday after the company reported disappointing 2016 second quarter earnings.

Ericsson reported earnings of 10 cents per share on revenue of $6.28 billion today. Analysts were looking for earnings of 11 cents per share on revenue of $6.7 billion.

The Swedish telecommunications provider said it is looking to further reduce costs as it restructures its business and becomes more streamlined to perform better in an increasingly competitive environment.

"The negative industry trends from the first quarter have intensified impacting demand for mobile broadband," CEO Hans Erik Vestburg said in a company statement, "especially in markets with a weak macro-economic environment."

In response to market decline, Ericsson will be reducing R&D spending, Vestburg told Barron's, but can continue to innovate due to the company's recent partnership with Cisco (CSCO).

Vestburg said that he is excited about the prospects for 5G, which he sees becoming standardized by 2020, Barron's reports. The company is investing more in the technology.

Separately, TheStreet Ratings rated this stock as a "hold" with a ratings score of C+.

The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and impressive record of earnings per share growth. However, TheStreet Ratings finds that the stock has had a generally disappointing performance in the past year.

You can view the full analysis from the report here: ERIC

Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. 

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