|Bid||87.92 x 0|
|Ask||87.96 x 0|
|Day's Range||87.84 - 89.34|
|52 Week Range||73.00 - 96.74|
|Beta (3Y Monthly)||0.97|
|PE Ratio (TTM)||1,353.23|
|Forward Dividend & Yield||1.00 (1.19%)|
|1y Target Est||81.10|
The world's mobile phone networks are being upgraded for 5G. The next-generation service will offer much faster data speeds. And that looks like being good news for Ericsson. The Swedish telecom gear maker beat forecasts on Thursday (October 17). It says 5G is catching on faster than it expected. Ericsson lifted its outlook for the year by about ten percent as a result. It now expects sales of up to 24.5 billion dollars. One surprise though. Ericsson says it's not seeing any benefit from the woes of its big rival. Huawei - the largest maker of telecoms equipment - is blacklisted by the U.S. over allegations it cooperates with Chinese spies. That's something the firm strongly denies. But Australia and New Zealand have joined the U.S. in banning the Chinese firm from their 5G networks. Some analysts thought that would let Ericsson cash in. But chief executive Borje Ekholm says that's not the case. He says all it's done is create worry and uncertainty in the market - to everyone's detriment.
European shares edged lower on Thursday, as strong earnings from Sweden's Ericsson were offset by fading optimism over the Brexit deal amid investor worries about its support in the British parliament. The pan-European STOXX 600 index closed down 0.1% after gaining as much as 0.9%, as investors initially cheered news that the European Union and Britain had clinched a deal on the terms of Britain's exit from the bloc.
Telecoms equipment maker Ericsson beat quarterly core earnings expectations on Thursday and lifted its market forecast for this year and its sales target for 2020, saying demand for superfast 5G networks was taking off earlier than expected. 5G networks are at the centre of a brewing technology war between United States and China, as they are expected to host critical functions from autonomous vehicles to smart electric grids and military communications, underscoring their importance to national security. Washington has put Chinese supplier Huawei on a trade blacklist and led a worldwide campaign to convince allies to ban the firm from their 5G networks, alleging its equipment could be used by Beijing for spying - which Huawei has repeatedly denied.
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China's Huawei may be facing closer official scrutiny in Europe amid U.S. allegations that it poses a security threat, but mobile operators in the region are still queuing up to buy its gear for their next-generation 5G networks. Of 65 commercial deals that Huawei has signed, half are with European customers building ultra-fast fifth-generation networks, the global networks market leader said on Tuesday at a client conference in Zurich.
Government officials confirmed that Germany's so-called security catalogue foresaw an evaluation of technical and other criteria, but that no single vendor would be barred in order to create a level playing field for equipment vendors. The United States has piled pressure on its allies to shut out Huawei, the leading telecoms equipment vendor with a global market share of 28%, saying its gear contained 'back doors' that would enable China to spy on other countries. German operators are all customers of Huawei and have warned that banning the Chinese vendor would add years of delays and billions of dollars in costs to launching 5G networks.
A new German security rulebook will not exclude Chinese telecoms equipment maker Huawei Technologies from supplying gear for the country's 5G mobile networks, a senior government source said on Monday. The 'security catalogue', due to be published this week, will confirm Germany's decision to keep a level playing field for suppliers to next-generation telecoms networks, despite calls by the United States to ban Huawei. Operators had warned that banning Huawei could add years of delays and billions of dollars in costs to rolling out 5G networks in Germany that could power super-fast home broadband, connected factories or, one day, self-driving cars.
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(Bloomberg) -- Ericsson AB said it expects to pay $1 billion to resolve investigations by U.S. authorities into business ethics breaches in six countries, including China, in one of the costliest corruption cases on record.The Sweden-based telecommunications equipment maker said in a statement Thursday it has made a provision of 12 billion kronor ($1.2 billion) to cover the penalty, and this will dent third-quarter earnings. Ericsson said it can’t comment on details of the process with the U.S. Securities and Exchange Commission and Department of Justice.Ericsson has cooperated with investigators since 2013, when the SEC began its probe into possible Foreign Corrupt Practices Act violations. It hasn’t disclosed details of the ethics breaches under investigation, though it said at the time that the probe related to a payment system used to win contracts in the 1990s. It said Thursday that the investigation covers a period ending in the first quarter of 2017 and involves FCPA breaches in China, Djibouti, Indonesia, Kuwait, Saudi Arabia and Vietnam.“We are ashamed about the historical conduct and we’re very unhappy about that and sad about being in this position, but we are confronting the issue,” Borje Ekholm, Ericsson’s chief executive officer, said in a phone interview. “Our compliance program has not been fit for purpose so over the last two years we have worked very hard to strengthen our program as much as possible, to do what is in our power to avoid these type of situations going forward.”Ericsson shares fell 0.9% and traded at 79.10 kronor at 12:05 p.m. local time. They have gained about 3% this year compared with a 16% advance for the benchmark OMX Stockholm 30 Index.The FCPA prohibits American companies and overseas firms with stocks trading on U.S. exchanges from paying bribes to foreign officials.Mid-TurnaroundEricsson is moving to resolve the probes as it battles Nokia Oyj for 5G network supply contracts and looks to win customers amid a U.S.-led boycott against rival vendor Huawei Technologies Co. Ericsson said in July the first big deployments in Asia will gradually pull down margins, although not enough to jeopardize profitability targets for 2020.Asked in a phone interview whether the ethics breaches will make it harder for the company to win 5G contracts, Ekholm said that “of course there is a risk” but that the company’s “focus on making sure we have a very competitive product portfolio is still in place.”Ekholm took over as CEO in 2017 to turn Ericsson around after fierce competition from Chinese rivals and dwindling carrier spending on fourth-generation wireless gear led to a plunge in the company’s shares. The new tech offers a chance to boost sales as companies invest big on equipment in a global market dominated by just three players.Third-quarter net income is expected to drop about 15% to 2.3 billion kronor, according to the average of analyst estimates compiled before Ericsson’s Thursday statement.Ericsson’s announcement has “some clear negative implications” with “meaningful cash outflows down the line,” analysts at Citigroup, including Amit Harchandani and Robert Lamb, said in a note. They also see potential risks of prosecution or charges against executives.“It’s very hard for us to assess” the risk of employees getting prosecuted, Ekholm said. “Criminal charges will be decided by the U.S. authorities or authorities in general and I cannot speculate about that.”Penalties of $1 billion would surpass the $965 million payment imposed on Sweden-based Telia Co. in 2017 after the telecommunications carrier admitted to paying hundreds of millions of dollars in bribes to a government official in Uzbekistan.Ericsson’s estimate of the charges it faces is “within the ballpark” of similar settlements, such as Telia’s, the Citigroup analysts said. The “overhang” around the case would probably go away by next year, they said.The SEC has undertaken 11 enforcement actions under the FCPA this year, including fines against Walmart Inc., Microsoft Corp., Deutsche Bank AG and Telefonica Brasil SA, according to the regulator’s website. Petróleo Brasileiro SA agreed to pay $1.78 billion last year over a bribery and bid-rigging scandal.Ericsson has acted to address shortcomings after identifying breaches of its code of business ethics and the FCPA, it said in the statement. The company also said it failed to react to red flags, enabling some employees to circumvent internal controls.“We have over the last two years taken steps do address those gaps and shortcomings and now we have a program that is much more fit for purpose and we’re ensuring that the company and every employee in the company follow our code of business ethics,” Ekholm said in the phone interview.“And you know the reality is that in a company of 100,000 employees there will be some rogue employees,” he said, adding that what’s key now is that Ericsson has a program in place to identify any misconduct and then take action quickly and thoroughly.(Updates with CEO comments. An earlier version corrected the spelling of kronor.)To contact the reporters on this story: Dave McCombs in Tokyo at firstname.lastname@example.org;Niklas Magnusson in Stockholm at email@example.comTo contact the editors responsible for this story: Sam Nagarajan at firstname.lastname@example.org, Jennifer RyanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The investigations, by the U.S. Securities and Exchange Commission and the Department of Justice, are linked to Ericsson's compliance with the U.S. Foreign Corrupt Practices Act (FCPA), Ericsson said. "The process to find a resolution is still ongoing," Ericsson said. The investigation covers a period ending with the first quarter of 2017 and revealed breaches of Ericsson's Code of Business Ethics and the FCPA in China, Djibouti, Indonesia, Kuwait, Saudi Arabia and Vietnam.
Mobile telecom gear maker Ericsson said on Thursday its third-quarter results will be hit by a 12 billion Swedish krona ($1.23 billion) provision it was making for U.S. probes into past corruption allegations. The investigations, by the U.S. Securities and Exchange Commission and the Department of Justice, are linked to Ericsson's compliance with the U.S. Foreign Corrupt Practices Act (FCPA), Ericsson said. "The process to find a resolution is still ongoing," Ericsson said.
Malaysia will start a nationwide demonstration of 5G projects next month, a minister said on Tuesday, indicating it was on track to become one of the first Asian countries to launch the technology. The government has said it wants to start rolling out the ultra-fast mobile internet service early next year, and unlike Vietnam and some developed nations, is not averse to letting its telecom companies work with China's Huawei. Huawei, the world's largest telecom equipment maker, was put on a U.S. blacklist in May after Washington said its equipment could be used for spying, a charge the company denies.
Every investor in Telefonaktiebolaget LM Ericsson (publ) (STO:ERIC B) should be aware of the most powerful shareholder...
In the short-term, the 5G tech revolution will be underwhelming. But in the long-term, it has the potential to radically change networks and transform economies for the better— and, if we’re not careful, the worse.
Swedish telecom equipment maker Ericsson's CEO Borje Ekholm told employees in an internal note this week that a recent media report of his imminent replacement was incorrect, a company spokesman said. Business daily Dagens Industri said last week, citing anonymous sources, that Ekholm was set to leave after less than three years on the job and would be replaced by defense material group Saab CEO Hakan Buskhe. Ericsson's shares fell over 3% on Aug. 28, the day the report was published.