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What's in the Cards for Ericsson (ERIC) This Earnings Season?

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Ericsson (ERIC - Free Report) is set to report first-quarter 2021 results on Apr 21, before the opening bell. In the last reported quarter, the company delivered a positive earnings surprise of 28.6%. The bottom line surpassed the Zacks Consensus Estimate by 6 cents.

This Sweden-based telecom equipment provider is expected to have recorded significantly higher aggregate revenues year over year. The performance has been primarily driven by 5G deployments in North-East Asia, North America and Europe.

Factors at Play

During the first quarter, Ericsson’s 5G radio access network (RAN) products and solutions powered dtac’s 5G services in the Bangkok Metropolitan area, the central plains and the eastern economic and industrial region of Thailand.

Ooredoo Group and Ericsson inked a global frame agreement for the supply of 5G radio, core and transport products and solutions as well as related implementation and integration services. The agreement covers all 10 of the Group’s operating companies in Qatar, Indonesia, Algeria, Iraq, Kuwait, Oman, Palestine, Tunisia, Myanmar and Maldives.

T-Mobile selected Ericsson for a major 5G network expansion across the United States. Ericsson was chosen by Asia-Pacific Telecom Co Ltd to modernize its network with 5G Non-Standalone Multi-Operator Core Network readiness. This includes integration with Far EasTone Telecommunications on the 3.5GHz frequency band in Taiwan.

Umniah selected Ericsson for the transformation of its RAN infrastructure in Jordan. Ericsson and Telefonica Brazil (trading as Vivo) inked an agreement to make Ericsson Charging the strategic monetization platform for Vivo’s prepaid, postpaid and hybrid-consumer and enterprise-convergent charging requirements.

Ericsson partnered with T-Systems, a subsidiary of the Deutsche Telekom Group, to offer campus network solutions worldwide. Saudi Telecom Company selected Ericsson as its managed services provider in Saudi Arabia. United Arab Emirates’ du, from Emirates Integrated Telecommunications Company, opted for Ericsson’s 5G RAN products and solutions.  

Taiwanese communications service provider Far EasTone Telecommunications selected Ericsson as its vendor for 5G Standalone and Non-standalone dual-mode 5G Core and Voice over LTE services. Ericsson was chosen by Telenet as its 5G RAN provider to bring the wide-reaching benefits of 5G to Belgium. These notable developments are likely to have had a positive impact on the company’s top line.

For the March quarter, the Zacks Consensus Estimate for revenues is pegged at $6,349 million, indicating growth of 23.3% from the year-ago quarter’s reported figure. The consensus estimate for adjusted earnings per share is pegged at 12 cents, which suggests an increase of 50%.

What Our Model Says

Our proven model doesn’t conclusively predict an earnings beat for Ericsson this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Ericsson’s Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is +11.43% as the former is pegged at 13 cents and the latter at 12 cents.

Ericsson Price and EPS Surprise

Ericsson Price and EPS Surprise

Ericsson price-eps-surprise | Ericsson Quote

Zacks Rank: Ericsson currently has a Zacks Rank #4 (Sell).

Stocks to Consider

Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:

NETGEAR, Inc. (NTGR - Free Report) is slated to release first-quarter 2021 results on Apr 21. It has an Earnings ESP of +1.52% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Verizon Communications Inc. (VZ - Free Report) is scheduled to release first-quarter 2021 results on Apr 21. The company has an Earnings ESP of +0.41% and a Zacks Rank #3.

CACI International Inc (CACI - Free Report) has an Earnings ESP of +0.18% and a Zacks Rank of 2. The company is set to report third-quarter fiscal 2021 results on Apr 21.

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