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COMMUNICATIONS SECTOR
Ericsson (ERICB SS) 4Q23 results are out and look like a marginal miss to consensus and the outlook comments look fairly bleak.
- Sales are down 16% in 4Q23 and 3% for the full year, latter coming in at SEK263.4m vs. consensus of 268.0m, so a small miss. Gross margin was broadly in line (38.6% for FY23, down 210bp y/y but against expectations of 38.9%) and FCF was SEK12.5bn in 4Q23 though helped by some one-offs.
- Outlook appears tough; “current market uncertainties” to continue in 2024, RAN market (radio access network… 5G) to decline ex-China and company believes network operators are under-investing so a recovery “should materialise”.
- The equity is indicating lower this morning but the traded debt more mixed. The most liquid ’27 bond has tightened meaningfully since Nov-23 wides and closed the premium to Nokia but there’s no good news catalyst obvious in these results.
Conf call with mgmt is just starting: https://edge.media-server.com/mmc/p/uy7dtn5r/
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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