Why Ericsson (ERIC) Stock Is Down Today

NEW YORK (TheStreet) -- Ericsson (ERIC) was falling -6.1% to $12.21 Wednesday after missing analysts' estimates for earnings and revenue in the first quarter.

For the first quarter the Swedish company posted earnings of 0.90 kronor a share, missing the Capital IQ Consensus Estimate of 0.93 kronor a share by 0.03 kronor. Revenue fell 8.7% from the year-ago quarter to 47.5 billion kronor ($7.21 billion), Ericsson's lowest quarterly revenue in more than three years. Analysts expected revenue of 51.4 billion kronor for the quarter.

Ericsson said sales declined in North America and Japan in the quarter. North American sales dropped 23% from the year-ago quarter, while sales in Northeast Asia fell 19%. Growth in China, the Middle East, and Latin America helped offset those declines.

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TheStreet Ratings team rates ERICSSON as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate ERICSSON (ERIC) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

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