Why LM Ericsson Stock Is Crashing Today
Shares of Telefonaktiebolaget LM Ericsson (NASDAQ: ERIC) fell hard on Thursday, following a third-quarter earnings report that fell short of market expectations. Ericsson's stock traded 15.1% lower at 1:20 p.m. ET, having fallen as much as 19.5% earlier in the day.
The Swedish maker of telecom-grade networking equipment saw Q3 sales rise 21% year over year to SEK 68 billion ($6 billion). Organic sales, adjusted for currency exchange effects and the recently closed acquisition of cloud-based communications expert Vonage, increased by 3% from the year-ago period. Earnings stopped at SEK 1.56 ($.14) per diluted share, down from SEK 1.73 ($.15) in Q3 2021.
The reported figures looked strong, but most of the revenue growth rested on acquisitions and "a large currency tailwind." The same currency effects also increased Ericsson's operating expenses and cost of goods sold, which resulted in management announcing a cost-cutting program.
Source Fool.com
