Research Desk Line-up: Westell Technologies Post Earnings Coverage
LONDON, UK / ACCESSWIRE / June 23, 2017 / Pro-Trader Daily takes a look at the latest corporate events and news making the headlines for Swedish mobile telecom gear maker, Telefonaktiebolaget LM Ericsson (publ) (NASDAQ: ERIC) following which we have published a free report that can be viewed by signing up at http://protraderdaily.com/optin/?symbol=ERIC. The Company announced on June 21, 2017, that it has signed a definitive agreement with multinational technology and Sketch-to-Scale solutions provider, Flex, to divest Ericsson Power Modules. This agreement is viewed as a step to redefine its business strategy, where the Company plans to focus primarily on its core business. For immediate access to our complimentary reports, including today's coverage, register for free now at:
Discover more of our free reports coverage from other companies within the Communication Equipment industry. Pro-TD has currently selected Westell Technologies, Inc. (NASDAQ: WSTL) for due-diligence and potential coverage as the Company announced on May 24, 2017, its financial results for Q4 FY17 which ended on March 31, 2017. Tune in to our site to register for a free membership, and be among the early birds that get our report on Westell Technologies when we publish it.
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Ericsson's power module business was founded in 1977, wherein 1983, the Company named the segment's first onboard DC/DC power module as Ericsson's product of the year. Currently, the unit deals in design and manufacturing of power supply products for information and communications equipment, including radio base stations, switches and routers, and multiple other computing and industrial applications. The power module portfolio of Ericsson includes about 500 board-mounted products, including, DC/DC converters, intermediate bus converters, POL regulators, power interface modules, and board power management supporting products.
Under terms of the agreement, Ericsson's Power Modules business will be on closing, transferred to Flex, which includes Shanghai Ericsson Electronics Corporation, Ltd., a manufacturing site in China, and business assets in Sweden. Post the execution of the transaction, about 300 employees and consultants are expected to be transferred from Ericsson to Flex Power.
Flex Power views this agreement as a step to expand its current collaboration and long-standing partnership with Ericsson while adding the industry-leading Power Module team to Flex. According to Ericsson, the BMR458 is the only advanced bus converter available today to offer active- or droop-current sharing.
The transaction is expected to close in Q3 of 2017 and is subject to customary closing conditions, including regulatory approvals.
Redefined Business Strategy
This offloading of the power modules business comes as the next step under the previously announced business strategy on March 28, 2017. The Company announced major portfolio changes to strengthen its core portfolio, namely: increasing investment in the Networks segment; enabling the global rollout of 4G and establishing a leading position in 5G; and shifting the IoT strategy from a systems-integration-led approach to a platform- and solutions-led strategy to better leverage Company's global scale and industry expertise.
Ericsson stated that owing to its increased focus on software technology development within virtualized core networks and management and monetization software, it will explore strategic opportunities for the IT Cloud Infrastructure hardware business. This agreement with Flex is viewed as the first step under the business divestiture strategy and would enable the Company to constantly innovate and deliver most competitive solutions while building a market-leading position in a fully connected world.
The Company recently reported a $300 million operating loss in Q1 FY17 for its Media business. Ericsson stated that it was viewing strategic opportunities, including the sale of its media solutions business and media services unit. The Company has shifted its focus to the core businesses, including networks, digital services, and the Internet of Things.
Last Close Stock Review
On Thursday, June 22, 2017, the stock closed the trading session at $7.25, climbing 1.68% from its previous closing price of $7.13. A total volume of 3.89 million shares have exchanged hands. Ericsson's stock price surged 3.72% in the last one month, 12.23% in the past three months, and 24.78% in the previous six months. Furthermore, since the start of the year, shares of the Company have rallied 24.36%. The stock has a dividend yield of 1.52% and currently has a market cap of $24.28 billion.
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SOURCE: Pro-Trader Daily