Equinix reports record Q2 gross bookings

Equinix reported Q2 revenue of $1.8 billion, a 5% increase over the previous quarter and up 10% on both an as-reported and normalized and constant currency basis over the same quarter last year. 

This represents the company's 78th consecutive quarter of revenue growth —- the longest streak of any S&P 500 company, according to Equinix.

Charles Meyers, President and CEO, Equinix, states "With record Q2 gross bookings that sizably surpassed the prior peak, Equinix had an outstanding first half of 2022, and our business continued to deliver strong and consistent results. The demand environment and our pipeline remain robust despite a complex global macroeconomic and political landscape, as we continue to enable digital leaders on their transformation journey."

Q2 net income was $216 million, a 47% increase over the previous quarter, primarily due to strong operating performance and a favorable tax settlement. EPS amounted to $2.37 per share, a 46% increase over the previous quarter.

Some highlights:

• Equinix has 49 major projects underway across 34 metros in 21 countries, including new data center builds in Dublin, Montréal, New York, Paris, Warsaw and the company's first build in Chennai, India.
• In May, Equinix closed the acquisition of four data centers from Empresa Nacional De Telecomunicaciones S.A. ("Entel"), a leading Chilean telecommunications provider (the "Entel Chile Acquisition"), extending Platform Equinix into Chile and bringing its global footprint to 70 metros across 31 countries.
• Equinix expects to close on the acquisition of one additional data center from Entel to enter Lima, Peru, in Q3.
• Equinix continued to strengthen its leadership position in the cloud ecosystem through the company's xScale program, which experienced strong leasing activity from top hyperscalers in Q2. The xScale portfolio has now leased more than 170 megawatts globally, with 11 xScale builds currently under development, of which more than 80% is pre-leased.
• Equinix's Future First sustainability strategy was recently recognized by Sustainalytics as among the best large-cap REITs for ESG. Equinix was also ranked seventh on the U.S. Environmental Protection Agency's National Top 100 list of the largest green power users.

https://www.equinix.com/newsroom/press-releases/2022/07/equinix-reports-second-quarter-2022-results

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Ericsson to take US$1.8B accounting charge

Ericsson will take an accounting charge of SEK 14.2 billion (approximately US$1.75 billion) following an impairment testing of its restated financial numbers and changes to the U.S. income tax code. The company said much of the write-down from its balance sheet is goodwill associated with investments made 10 years ago or more. The drop in the U.S. corporate income tax rate from 35% to 21% effective this year also results in a revaluation of the company's U.S. deferred tax assets.

The write-down is distributed as follows for Ericsson's business units:

• Segment Digital Services: impairment of SEK 6.7 b. of goodwill and SEK 0.4 b. of intangible assets
• Segment Other: impairment of SEK 6.0 b. of goodwill, SEK 0.3 b. of intangible assets, and SEK 0.4 b. of fixed assets
• Segment Managed Services: impairment of SEK 0.3 b. of deferred costs related to termination of certain transformation activities
• Segment Networks: impairment of SEK 0.2 b. of capitalized development expenses related to technologies that are no longer planned to be used

Ericsson borrows $370M to fund 5G R&D

Monday, January 08, 2018  Ericsson, Sweden  No Comments

In late December, Ericsson signed a credit agreement with the Nordic Investment Bank (NIB) for US$220 million, maturing in 2023, and with AB Svensk Exportkredit (SEK) for US$150 million, maturing in 2025. Of these new funds, $98 million will replace credit with NIB that was set to mature in 2019. Ericsson said the remaining amount will be used to strengthen its balance sheet and to support R&D activities to further develop 5G and other mobile innovations.

Ericsson invested SEK 31.6 billion in R&D in 2016 (US$3.9 billion).

Ericsson sets 2020 financial targets

Wednesday, November 08, 2017  Ericsson  No Comments

Ericsson outlined key elements of a transformation plan to stabilize the company and improve its margins by the 2020 timeframe. The restructuring is taking longer than the company initially expected due to a weaker than expected Radio Access Network equipment market that will have significant compound effect over the coming years. The exchange rate of the Swedish krona against the USD is making the situation even more challenging.

During its Capital Markets Day event in Sweden, Ericsson executives reaffirmed that the corporate mission is "to enable the full value of connectivity for its service provider customers."

Some group financial targets

• achieve net sales of SEK 190 – 200 b. by 2020
• achieve more than 12 % operating margin on a sustainable basis beyond 2018, excluding restructuring costs.
• achieve a gross margin of 37 – 39% and an operating margin of at least 10% for the Group in 2020, excluding restructuring charges. This target does not factor in any significant 5G sales during this time period.

Some other takeaways from the meeting

• Ericsson expects that the Radio Access Network equipment market will decline by -2% during 2018, and by -1% during 2019. In 2020, the market is expected to remain flat with no further decline.
• Beginning in Q4 2017, Ericsson will report its results in four segments: Networks, Digital Services, Managed Services and Other. 
• Ericsson is expected weaker short-term performance in segment IT & Cloud, due to past contract commitments.
• The Cisco-Ericsson partnership will not reach its goal of $1 billion in sales in 2018.
• Ericsson is looking to sell its Media business.

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