Group 1: Fund Performance - Hotchkis & Wiley Global Value Fund outperformed the MSCI World Value Index in Q4 2025, returning 3.80% compared to 3.34% for the Index [1] - The Fund achieved a year-to-date return of 23.77%, exceeding the Index's 20.79% [1] - Positive stock selection was a key driver of the Fund's performance in both Q4 and the entire calendar year [1] Group 2: Non-US Equities - In 2025, stocks outside the US significantly outperformed those within the US, although the valuation gap remained largely unchanged [1] - The Fund maintained an overweight position in non-US equities [1] Group 3: Key Holdings - Telefonaktiebolaget LM Ericsson (publ) (NASDAQ:ERIC) was highlighted as a leading contributor to the Fund's performance [2] - Ericsson's stock closed at $10.89 per share on January 29, 2026, with a one-month return of 14.63% and a 52-week gain of 45.39% [2] - Ericsson has a market capitalization of $37.097 billion [2] Group 4: Ericsson's Business Outlook - Ericsson is a major vendor of hardware and software for wireless networks outside China, but its earnings are currently below normal due to low demand in Japan and India [3] - The company is working on turning around its Cloud Software and Services business, and its stock has shown improvement as management indicated a shift towards returning more capital to shareholders [3] - Recent results for Q3 2025 were modestly better than expected, with improvements in gross margins and the Cloud Software and Services business [3] Group 5: Market Sentiment and Competition - Ericsson is not among the 30 most popular stocks among hedge funds, with 16 hedge fund portfolios holding its stock at the end of Q3 2025, down from 17 in the previous quarter [4] - While Ericsson shows potential as an investment, certain AI stocks are perceived to offer greater upside potential with less downside risk [4]

Core Viewpoint - Ericsson reported stronger-than-expected fourth-quarter earnings, with an EPS of 27 cents, surpassing the analyst consensus estimate of 23 cents [1] Financial Performance - The company's reported sales for the quarter were 69.3 billion Swedish Krona ($7.37 billion), representing a 5% year-over-year decline but exceeding the consensus revenue estimate of $7.03 billion [2] - Organic sales rose by 6% for the period, excluding the impact of acquisitions, divestments, and foreign currency fluctuations [2] Segment Performance - The Networks division experienced a 6% decline in sales, while the Enterprise segment saw a significant 25% drop, mainly due to the divestment of iconectiv [3] - Cloud Software and Services sales grew by 3%, with a 12% increase in sales across all market areas [4] - Within the Networks segment, organic sales decreased by 4%, with growth in specific regions partially offsetting declines in others [4] Profitability and Cash Position - The adjusted gross margin improved to 48.0% from 46.3% year-over-year, driven by cost-reduction actions and operational efficiency [5] - Adjusted EBIT margin improved to 17.7% from 13.1% year-over-year, and adjusted EBITA margin improved to 18.3% from 14.1% [5] - Free cash flow before M&A was 14.9 billion Swedish Krona, down from 15.8 billion Swedish Krona in the prior-year period [6] - The company's net cash position was 61.2 billion Swedish Krona at year-end 2025 [6] CEO Commentary - CEO Börje Ekholm highlighted that the company achieved organic growth despite a flat RAN market, driven by momentum in mission-critical networks, 5G core, and Enterprise [7]

Core Insights - Ericsson reported strong fourth-quarter 2025 results, with earnings and revenues exceeding Zacks Consensus Estimates, although sales were impacted by weakness in North East Asia and the Americas [2][5][9] Financial Performance - Net income for the fourth quarter was SEK 8.6 billion ($0.91 billion), or SEK 2.57 (27 cents) per share, compared to SEK 4.9 billion or SEK 1.44 per share in the prior-year quarter, driven by lower selling and administrative expenses and research and development costs [3][4] - For the full year 2025, net income reached SEK 28.7 billion or SEK 8.51 per share, a significant increase from SEK 0.4 billion or SEK 0.01 per share in 2024, aided by capital gains from divestitures and reduced operating expenses [4] Revenue Analysis - Total revenues for the fourth quarter were SEK 69.3 billion ($7.36 billion), a 5% decline year over year, but a 6% increase on an organic basis, with sales growth hindered by challenges in North East Asia and the Americas [5][9] - For 2025, total revenues were reported at SEK 236.7 billion, also down 5% year over year [5] Segment Performance - The Networks segment generated SEK 44.2 billion ($4.69 billion), down 6% from the previous year, but the adjusted gross margin improved to 49.6% due to cost reductions and operational efficiency [6][9] - Cloud Software and Services revenues increased by 3% year over year to SEK 20 billion ($2.12 billion), with an improved adjusted gross margin of 44.3% [7] - The Enterprise segment saw revenues decline by 25% to SEK 4.6 billion ($489 million), attributed to falling sales in the Global Communication Platform and divestiture of iconective [7] Regional Performance - Revenues from South-East Asia, Oceania, and India increased to SEK 8.98 billion ($955 million), while North East Asia revenues decreased to SEK 5.2 billion ($553 million) [8] - The Americas reported net sales of SEK 22.9 billion ($2.44 billion), down 11% year over year [8] Other Financial Metrics - Gross income, excluding restructuring charges, slightly declined to SEK 33.2 billion ($3.53 billion) from SEK 33.7 billion in the previous year, with an adjusted gross margin of 48% [11] - Cash generated from operating activities in the fourth quarter was SEK 16.5 billion ($1.75 billion), with total cash from operations for 2025 at SEK 33 billion, down from SEK 46.3 billion in 2024 [12] Future Outlook - For Q1 2026, revenues from the Networks segment are expected to align with three-year average seasonality, while revenues from Cloud Software and Services are anticipated to fall below the three-year average [13]

Ericsson (NASDAQ:ERIC) reported earnings per share of $0.28, surpassing estimates and showcasing strong operational execution.The company achieved a revenue of approximately $7.68 billion, exceeding expectations due to growth across all segments, especially in Cloud Software and Services.Ericsson plans to return 15 billion Swedish crowns ($1.7 billion) to shareholders, indicating a strong financial position and commitment to shareholder value.Ericsson, trading as NASDAQ:ERIC, is a leading Swedish telecommun ...

Core Insights - The company demonstrated solid execution of its strategic priorities, achieving organic growth in a flat RAN market through efforts in mission-critical networks, 5G core, and enterprise solutions [3] - The operational improvements over recent years have led to enhanced margins and cash flow, marking the ninth consecutive quarter of year-over-year adjusted EBITA margin expansion [3][4] - The company plans to increase investments in defense while optimizing its cost base to support margins and cash flow generation in the upcoming years [5] Fourth Quarter Highlights - Organic sales growth was achieved in all segments, with a notable 12% growth in the Cloud Software and Services segment [4] - Reported sales for Q4 were SEK 69.3 billion, a decrease from SEK 72.9 billion year-over-year, while adjusted gross income was SEK 33.2 billion, slightly down from SEK 33.7 billion [4][7] - Adjusted EBITA for Q4 was SEK 12.7 billion, reflecting an 18.3% margin, benefiting from improved segment margins in Mobile Networks [4][7] Full-Year Highlights - For the full year, reported sales were SEK 236.7 billion, down from SEK 247.9 billion, with adjusted gross income increasing to SEK 113.9 billion despite a SEK -7.2 billion currency headwind [4][7] - The adjusted gross margin improved to 48.1%, up from 44.9%, driven by enhancements in Mobile Networks [4][7] - Net income for the year was SEK 28.7 billion, with diluted EPS of SEK 8.51, a significant increase from SEK 0.01 the previous year [4][7] Financial Position - The company generated strong free cash flow, with SEK 14.9 billion before M&A in Q4 and SEK 26.8 billion for the full year, resulting in a cash flow to net sales ratio of 11.3% [4][7] - Net cash at the end of 2025 was SEK 61.2 billion, a substantial increase from SEK 37.8 billion the previous year [4][7] - The Board proposed an increased dividend of SEK 3.00 per share and a share buyback program of SEK 15 billion [4][5]

Core Insights - Ericsson reported mixed third-quarter 2025 results, with adjusted earnings exceeding estimates while revenues fell short due to regional weaknesses [1][3][10] Financial Performance - Net income for Ericsson was SEK 11.3 billion ($1.19 billion), translating to SEK 3.33 (35 cents) per share, a significant recovery from a loss of SEK 3.9 billion in the prior-year quarter [2] - Adjusted earnings were 16 cents, surpassing the Zacks Consensus Estimate of 13 cents [2] - Total revenues amounted to SEK 56.2 billion ($5.8 billion), down 9% year over year, missing the Zacks Consensus Estimate of $5.89 billion [3] Segment Results - The Networks segment generated SEK 35.4 billion ($3.72 billion), an 11% decline from SEK 40 billion in the previous year, missing revenue estimates [4] - Cloud Software and Services revenues increased by 3% year over year to SEK 15.3 billion ($1.6 billion), slightly exceeding estimates [5] - The Enterprise segment reported revenues of SEK 5.1 billion ($536 million), down 20% from the prior year, missing revenue estimates [6] Regional Performance - South-East Asia, Oceania, and India revenues decreased to SEK 7.1 billion ($746 million) from SEK 7.7 billion in the prior-year quarter [7] - North East Asia revenues fell 4% year over year to SEK 3.8 billion ($399 million) [7] - Revenues from the Americas were SEK 19.8 billion ($2.08 billion), down 15% year over year [7] - Europe, Middle East, and Africa markets saw a 1% decline to SEK 16.72 billion ($1.75 billion) [8] Operational Efficiency - Gross margin improved to 48.1% from 46.3% year over year, driven by cost optimization and operational efficiency [10][11] - The Networks segment's gross margin rose to 50% from 48.3% in the previous year [4] Cash Flow and Liquidity - Ericsson generated SEK 7.9 billion ($830 million) in cash from operating activities during the quarter [12] - As of September 30, 2025, the company had net cash of SEK 51.9 billion ($5.51 billion) [12] Outlook - For Q4 2025, revenues from the Networks and Cloud Software and Services segments are expected to align with historical seasonal averages, with gross margins projected between 49-51% [13]

Core Insights - Ericsson's stock has decreased by nearly 10% over the last five trading days despite a Q2 earnings report that exceeded expectations, attributed to macroeconomic concerns and cautious forecasts overshadowing margin improvements and a return to profitability [2][3] Financial Performance - The company reported an adjusted operating profit of SEK 7.0 billion (~$728 million), surpassing consensus estimates of SEK 6.1 billion, marking a recovery from a SEK 11.9 billion loss the previous year [3] - Gross margin increased to 47.5%, and EBITDA margin reached a three-year peak of 13.2%, indicating enhanced operational efficiency [3] - Revenue fell by 6% year-over-year to SEK 56.1 billion, impacted by a SEK 4.7 billion headwind from currency fluctuations, with organic growth limited to only 2% [4] Regional Performance - North America showed small gains, while significant declines were observed in India and Southeast Asia as telecom operators reduced expenditures following intense 5G rollouts [4] Market Challenges - Tariffs are squeezing margins despite efforts to localize production in the U.S., with management cautioning that these pressures could intensify [5] - Q3 forecasts fell short of expectations, with anticipated Networks sales expected to fall below seasonal patterns, while Cloud Software and Services are expected to keep pace with historical trends [5] Valuation Metrics - The stock is trading at a trailing P/E of approximately 14.5x, significantly lower than the S&P 500's 26.9x, and a forward P/E of 15–16x, marginally above its 10-year average of roughly 13x [6] - Price-to-sales ratio stands at 1.0x, aligning with its historical range, while price-to-free cash flow is merely 0.6 compared to 20.9 for the S&P 500 [6] Future Outlook - Sustained investor interest will likely depend on growth in underperforming regions, stabilization of tariff pressures, and margin enhancement beyond cost cuts [7]

Core Insights - Ericsson reported mixed second-quarter 2025 results, with adjusted earnings exceeding estimates while revenues fell short due to regional weaknesses [1][3][10] Financial Performance - Net income for Ericsson was SEK 4.6 billion ($476 million), a significant recovery from a loss of SEK 11 billion in the prior-year quarter, with adjusted earnings beating the Zacks Consensus Estimate [2][10] - Total revenues amounted to SEK 56.1 billion ($5.8 billion), down 6% year over year, and missed the Zacks Consensus Estimate of $5.94 billion, although organic sales improved by 2% [3][10] Segment Results - The Networks segment generated SEK 35.7 billion ($3.67 billion), a 5% decline from the previous year, missing revenue estimates of SEK 42 billion, but gross margin improved to 49.5% from 46.1% [4] - Cloud Software and Services revenues decreased by 5% year over year to SEK 14.4 billion ($1.49 billion), slightly below estimates, while gross margin improved to 43.2% from 37.2% [5] - The Enterprise segment reported SEK 5.5 billion ($569 million), down 14% from the prior year, but net sales exceeded estimates [6] Regional Performance - South-East Asia, Oceania, and India revenues fell to SEK 5.5 billion ($569 million) from SEK 7.7 billion, while North East Asia saw a 17% decline to SEK 3.8 billion ($393 million) [7] - Revenues from the Americas remained stable at SEK 19.8 billion ($2.04 billion), and Europe, Middle East, and Africa experienced a 6% decline to SEK 16.2 billion ($1.67 billion) [8] Other Financial Metrics - Gross income, excluding restructuring charges, improved to SEK 27 billion ($2.79 billion) from SEK 26.3 billion, with a gross margin of 48% compared to 43.9% in the previous year [11] - Cash generated from operating activities was SEK 4.2 billion ($434 million), with net cash of SEK 36.04 billion ($3.8 billion) as of June 30, 2025 [12] Outlook - For Q3 2025, revenues from Networks and Cloud Software and Services are expected to align with historical seasonality, with gross margin in the Networks segment projected between 48-50% [13]

Core Insights - The company reported solid execution of strategic and operational priorities, achieving a three-year high in adjusted EBITA margin, supported by efficiency actions and a structurally lowered cost base [2][5] - Growth in the Americas continues, while Europe has stabilized; global fixed wireless access (FWA) customers have surpassed 160 million, driving significant network traffic [3][5] - The company is increasing investments in AI, which is seen as key to accelerating innovation and driving operational efficiencies [4][5] Financial Highlights - Net sales for Q2 2025 were SEK 56.1 billion, a decrease of 6% year-over-year from SEK 59.8 billion; organic sales growth was 2% [5][6] - Adjusted gross income increased to SEK 27.0 billion, up 3% from SEK 26.3 billion, with an adjusted gross margin of 48.0%, compared to 43.9% in the previous year [5][6] - Adjusted EBITA was SEK 7.4 billion, reflecting an 83% increase year-over-year, with an adjusted EBITA margin of 13.2% [5][6] - Net income for Q2 was SEK 4.6 billion, compared to a loss of SEK 11.0 billion in the previous year; diluted EPS improved to SEK 1.37 from -3.34 [5][6] - Free cash flow before M&A was SEK 2.6 billion, down 66% from SEK 7.6 billion [5][6] Operational Performance - The company achieved a 48% adjusted gross margin and a three-year high in adjusted EBITA margin, indicating strong operational execution [5][6] - Strong progress in IPR licensing was noted, with further opportunities to increase IPR revenues [5] - Sales growth was primarily driven by the Americas and IPR licensing, although there were declines in other market areas [5][6]