Ericsson (ERIC) to Recruit 300 Staff in the United States
Ericsson ERIC recently announced that it will add around 300 jobs in the United States. The company’s decision was backed by its motive to cater to the increasing demand for next-generation 5G equipment. Notably, the move is part of the rise in the company’s research and development investment.
Ericsson, being one of the premier telecom services providers, is much in demand among operators to expand network coverage and upgrade networks for higher speed and capacity. The company has also decided to build its first 5G radios in the United States by the end of 2018.
Existing Business Scenario
Ericsson is focusing on 5G system development and has undertaken many notableendeavorsto position itself as a market leader in 5G. The company believes that standardization of 5G is the cornerstone for digitization of industries and broadband. Moreover, Ericsson foresees mainstream 4G offerings to give way to 5G technology in the near future. Meanwhile, the impending deployment of 5G networks in 2020 is expected to boost the adoption of IoT devices with technologies like network slicing gaining more prominence.
This Zacks Rank #3 (Hold) stock has outperformed the industry in the past six months with a return of 18.3% compared with the industry’s rise of 2.7%.
Moreover, the company constantly seeks to seize business opportunities as operators shift toward 4G deployments and prepare grounds for the forthcoming 5G revolution. Ericsson also plans to focus more on software sales and recurring business that complements its thriving Professional Services business in terms of “targeted growth” investments. With such concerted efforts, Ericsson expects to be better-equipped to address the varied needs of its customer segments and capitalize on the market opportunities for faster growth.
However, soft mobile broadband demand and challenging macroeconomic conditions in the emerging markets are acting as deterrents for major investments by telecom equipment behemoths, and this has significantly dented Ericsson’s performance. Also, the company faces stiff competition from various big multinational wireless telecom service providers, and remains vulnerable to uncertain economic conditions.
Some better-ranked stocks from the same space are Atlantic Power Corporation AT, Telephone and Data Systems, Inc. TDS and VistraEnergy Corp. VST. While Atlantic Power Corporation sports a Zacks Rank #1(Strong Buy), Telephone and Data Systems and Vistra Energy carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Atlantic Power Corporation surpassed estimates twice in the trailing four quarters with an average positive earnings surprise of 7.24%.
Telephone and Data Systems outpaced estimates twice in the preceding four quarters with an average positive earnings surprise of 88.80%.
Vistra Energy surpassed estimates thrice in the preceding four quarters with an average positive earnings surprise of 119.44%.
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