Ericsson (ADR) (NASDAQ:ERIC) has announced that in the third trimester its EBIT went up to 4.2B kronors ($658M) from 3.1B kronors in the same period last year but the company missed the estimates of 4.5B. the company’s total profit was up by 34 percent by 2.92B kronors and its total income was down 3 per cent to 52.98B kronors missing the estimate of 55.1B kronors.
The company is a global leader in mobile telecommunication infrastructure with a market capitalization of $41.9 billion and yearly sales of $35.35 billion. On October 14 Barkley a 55.1B rating agency had demoted the company ratings to underweight while upgrading the estimates of its rivals Alcatel-Lucent to overweight.
People following the market think\k that the demotion was more to do with its rivals having the capability to group their resources to meet the challenge of the present number 1 supplier of telecommunication network infrastructure. Two such companies that are competing with Ericson are gaining confidence as per the researchers.
The first competitor would be the merger of Nokia and the in trouble French technology company Alcatel. While this rumor is yet to be finalized, Barley believes that there is some truth in it. According to it, it makes sense for Nokia which has lots of cash after selling its handsets unit to join hands with Alcatel Lucent SA (ADR) (NYSE:ALU).
The second competitor Ericson might need to face will be Cisco the technology network infrastructure firm. Trying to understand the public announcements of its CEO in the last few weeks researchers predict that the company would be competing with Ericson straight on in the mobile base station market through its recent buy Ubiquisys.
