By Dominic Chopping
STOCKHOLM--Sweden's Ericsson is due to report second-quarter earnings on Tuesday. Here is what you need to know:
NET PROFIT: The telecom-equipment maker is expected to post a net profit of 3.39 billion kronor ($354.6 million), according to a consensus provided by FactSet, compared with a loss of 11.13 billion kronor in the same period a year prior. Earnings last year were weighed by an impairment of 11.4 billion kronor related to its Vonage cloud communications subsidiary.
SALES: A FactSet forecast expects sales to slip 0.9% to 59.29 billion kronor from 59.85 billion kronor a year earlier.
The stock is up around 9.2% from a year ago and trades at 77.40 kronor on Monday.
WHAT TO WATCH:
--Ericsson has previously guided for a negative impact from tariffs in its networks business of around one percentage point, with its second-quarter adjusted gross margin in the unit expected to be in the range of 48% to 50%. It expects network sales growth in the second quarter to be broadly similar to the three-year average seasonality of 8%.
--In the first quarter, the company reported a strong group adjusted gross margin at 48.5%, thanks mainly to a network gross margin of 51%. The network gross margin was driven by cost savings and geographical mix, with more sales in North America. UBS expects a second-quarter group gross margin of 46.7%.
--UBS expects the trend to slow in 2025 as the U.S. market normalizes in 2025, leading to a less favorable mix. "Therefore, North America networks' performance will be closely watched in the upcoming results," analyst Francois-Xavier Bouvignies said in a note.
--Although the radio access network market is still expected to stabilize in 2025--after the crash in 2023-24--there is still some downside risk in the coming months, depending on the final outcome of U.S. tariffs, Kepler Cheuvreux analyst Sebastien Sztabowicz says.
Write to Dominic Chopping at dominic.chopping@wsj.com
(END) Dow Jones Newswires
July 14, 2025 05:34 ET (09:34 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.