Ericsson shares plunge 13% as Q2 earnings miss Wall Street estimates

Ericsson reported Q2 revenue of $5.43 billion, missing analyst estimates, and adjusted earnings that fell well short of expectations.

"The results reflect a 1% organic sales decline and an 8% year-over-year drop in the Networks segment," the company said in its earnings release.

The Swedish telecom equipment maker posted net sales of SEK 52.7 billion, or about $5.43 billion, compared with the $5.68 billion analysts had expected. Adjusted earnings per share came in at $0.1258 versus a consensus forecast of $1.19, according to Reuters. Free cash flow also missed expectations. The company did not disclose forward guidance.

The miss sent Ericsson shares down more than 13% by midday on July 14, wiping out billions in market value. The decline puts pressure on the company as it navigates a slowdown in its core networks business while telecom operators cut spending on 5G infrastructure.

The earnings miss raises questions about Ericsson's ability to stabilize its networks business, which accounts for a significant portion of revenue. Investors will watch for any strategic updates or cost-cutting measures when the company holds its next earnings call.

This article is for informational purposes only and does not constitute investment advice.