Why LM Ericsson Stock Looks Like a Buy After Today's Earnings-Based Price Drop
Shares of Telefonaktiebolaget LM Ericsson (NASDAQ: ERIC) fell as much as 10.8% Thursday morning, making a modest recovery to a price drop of 8.9% by noon ET. The Swedish provider of equipment and services for telecom and networking infrastructure posted second-quarter results today, falling short of analyst expectations across the board.
Ericsson saw top-line sales fall 2.6% year over year to $6.36 billion. Earnings came in at $0.14 per diluted share, unchanged from the year-ago period. Your average analyst was looking for earnings near $0.16 per share on revenue in the neighborhood of $6.45 billion.
Management said that sales were held back by limited supplies of the semiconductors used in Ericsson's networking hardware, and inflationary pressures are driving up the cost of hardware components. Higher transportation and delivery costs play a large part in that story.
Source Fool.com
