LM Ericsson Telephone, the Swedish telecoms equipment maker, saw its stock plummet over 8% in Friday's pre-market trading session following the release of its fourth-quarter 2024 results and disappointing guidance for the first quarter of 2025.
While Ericsson's adjusted earnings per share of $0.20 for Q4 2024 met analysts' expectations, its revenue of $6.77 billion narrowly missed forecasts. However, the bigger concern for investors was the company's guidance that hinted at potential headwinds ahead.
Ericsson stated that sales growth for the first quarter of 2025 is expected to align with its average three-year seasonality, suggesting a potential slowdown in growth. This outlook, coupled with Ericsson's mixed Q4 performance outside of its core networks business, led analysts from firms like JPMorgan to predict that consensus sales estimates for the company may need to be lowered.