Ericsson Shares Fall On Missing Q2 Earnings; Notes Margin Expansion, Forges $8.3B 5G Deal With Verizon

Telefonaktiebolaget LM Ericsson (NASDAQ:ERIC) inked a multi-year agreement worth $8.3 billion with Verizon Communications Inc (NYSE:VZ) to provide its 5G solutions to accelerate Verizon's deployment of 5G network in the U.S.
Ericsson plans to leverage Cloud RAN and our Street Macro solutions, adding depth and versatility to 5G network rollouts across the U.S. under the arrangement.
Verizon will deploy Ericsson's 5G MIMO C-band, low-band, and millimeter wave (mmWave) solutions to enhance and expand Verizon's 5G Ultra Wideband coverage, network performance, and user experience.
Additionally, Ericsson reported second-quarter FY21 revenue of $6.53 billion, missing analyst consensus of $6.67 billion.
Group organic sales grew by 8% Y/Y.
Organic sales in Networks rose 11% Y/Y, and Digital Services were stable Y/Y.
It reported an EPS of $0.14, missing analyst consensus of $0.15.
The adjusted gross margin expanded 520 basis points to 43.4%, driven by operational leverage in Networks.
The adjusted EBIT margin expanded 240 basis points to 10.6%.
The company raised the RAN market outlook for 2021 from 3% YoY growth to 10%.
Price action: ERIC shares traded lower by 8.68% at $12.10 in the premarket session on the last check Friday.