Ericsson (ERIC) To Expand LiLAC Group's VSPP Services

Ericsson (ST:ERICAs) (NASDAQ:ERIC) has entered into a partnership with leading international TV and broadband company, Liberty Global’s (NASDAQ:LBTYA) operating unit Liberty Global Latin America and Caribbean (“LiLAC Group”), to help expand the Digital Video Recording (“DVR”) services of two of its operators. This two-year deal shall further reinforce Ericsson’s TV and media solutions business in Latin America.

Two of LiLAC Group’s television operators namely – Chile’s VTR and Puerto Rico’s Liberty Cablevision (NYSE:CVC) – are leveraging on Ericsson’s Video Storage and Processing Platform (“VSPP”) to expand their DVR services. Ericsson’s VSPP is well reputed for its ability to simplify recording and other superior functionalities. VSPP has also proved its mettle as an avant-garde technology offering that aids in seamless transformation of legacy television services into novel cloud-based services.

Both VTR and Liberty Cablevision are looking forward to simplify their Cloud DVR and video on demand (VoD) architectures. This will, in turn, eventually slash high operational costs associated with these services. Ericsson’s VSPP will assist LiLaC Group in improving its media content and quality, thus boosting customer satiation. It will also empower the TV operators to address the ever-changing customer needs and come up with future growth strategies as well.

With the delivery of over 50 transformation programs, Ericsson's consulting and systems integration services is on a roll. The company has been winning multiple lucrative contracts which have proved to be sturdy revenue drivers. TV and media organizations are increasingly turning toward Ericsson for its expertise. The company has established itself as a dominant player in Cloud DVR deployment, with prominent clients like Belgian telecommunication firm Proximus under its belt.

Despite a robust media business, Ericsson has been grappling with a host of macroeconomic issues. These have proved to be major drags on its financial performance, of late. Especially, reduced consumer telecom spending and currency fluctuations are posing as strong headwinds.

Saturated market supply and lawsuit issues are other challenges faced by the company. Further, stiff competition from peers, prolonged weakness in key end-markets and ongoing industry consolidation among customers & major rivals are adding to this Zacks Rank #4 (Sell) company’s woes.

Stocks to Consider

Some better-stocked ranks in the space include Ubiquiti Networks, Inc. (NASDAQ:UBNT) and Clearfield, Inc. (NASDAQ:CLFD) . Both the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Networking products and solutions provider, Ubiquiti Networks has an excellent earnings surprise history, beating estimates each time, over the trailing four quarters. It has a positive average surprise of 13.2%.

Manufacturer of passive connectivity products, Clearfield has a decent earning surprise history. The stock has beat estimates thrice over the trailing four quarters, with a whopping average beat of 82.1%.

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