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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.
TECHNOLOGY
- Ericsson to report earnings on Friday before the open. BBG consensus implies market is looking for rev -9% YoY and EBITA +3%.
- Revenue has been trending downwards in recent reports; at Q1 the issuer expected continued softness in Q2 with potential improvement from H2. Dell’Oro recently increased its expectation for RAN market decline this year from 4% to 5-8% which could weigh on the potential H2 stabilisation which would in turn put pressure on guidance.
- EBIT decline has stabilised somewhat in recent quarters including a strong beat at Q1 (the SEK 4.3bn came against consensus of SEK 2bn; still a beat after accounting for a SEK 1.9bn one-off gain), largely on the back of recent cost-cutting efforts.
- FCF has improved on the back of the EBIT stabilisation and has allowed for replenishment of net cash which was heavily depleted in the wake of the Vonage acquisition in 2022. The Vonage unit was last week impaired for a second time on slower than expected growth.
- Ericsson 31s have outperformed Nokia 31s by ~15bp since they reported in April. Since then, we have seen Ericsson exit US monitorship with a corresponding resumption of a stable outlook at S&P while Nokia has announced the Infinera acquisition though this hasn’t had a large impact on relative performance.
- Ericsson curve still sits steep vs. Nokia; Ericsson 29s offering similar spreads to Nokia 31s – Nokia has a stronger BS (though the Infinera acquisition narrows the gap) but faces much of the same sectoral issues as Ericsson.
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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