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Ericsson reports first quarter results 2013

Apr 24 2013 12:00AM

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STOCKHOLM, SWEDEN -- (Marketwired) -- 04/24/13 --

First quarter highlights

* Sales in the quarter were SEK 52.0 b. For comparable units and adjustedfor FX and hedging, sales increased 7% YoY and declined -19% QoQ.

* Operating income incl. JV was SEK 2.1 b. with an operating margin of4.0%. Excluding the restructuring charges related to the reduction ofoperations in Sweden of SEK 1.4 b. the margin amounted to 6.7%. Last year's marginof 17.8% was positively impacted by a gain of SEK 7.7 b. from thedivestment of Sony Ericsson.

* Net income was SEK 1.2 (8.8) b.

* EPS diluted was SEK 0.37 (2.76). EPS Non-IFRS was SEK 0.99 (3.14).

* Cash flow from operating activities was SEK -3.0 b. primarily driven by higher working capital.

* Net cash decreased by SEK -6.3 b. QoQ to SEK 32.2 b. mainly due tonegative operating cash flow and reclassification of Swedish special payrolltaxes of SEK 1.8 b. from Other current liabilities to Pension liabilities.


--------------------------------------------------------------------------- Q1 Q1 YoY Q4 QoQ SEK b. 2013 2012(2)) Change 2012 Change--------------------------------------------------------------------------- Net sales 52.0 51.0 2% 66.9 -22%--------------------------------------------------------------------------- Of which Networks 28.1 27.3 3% 35.3 -20%--------------------------------------------------------------------------- Of which Global Services 21.5 20.6 4% 28.0 -24%--------------------------------------------------------------------------- Of which Support Solutions 2.4 3.0 -19% 3.6 -33%--------------------------------------------------------------------------- Gross margin 32.0% 33.3% - 31.1% ---------------------------------------------------------------------------- Operating income excl JV 2.1 10.5 -80% 4.8 -55%--------------------------------------------------------------------------- Operating margin excl JV 4.1% 20.6% - 7.1% ---------------------------------------------------------------------------- Of which Networks 6% 6% - 8% ---------------------------------------------------------------------------- Of which Global Services 3% 6% - 6% ---------------------------------------------------------------------------- Of which Support Solutions -1% -1% - 8% ---------------------------------------------------------------------------- Operating income incl JV 2.1 9.1 -77% -3.8 ---------------------------------------------------------------------------- Operating margin incl JV 4.0% 17.8% - -5.7% ---------------------------------------------------------------------------- Net income 1.2 8.8 -86% -6.3 ---------------------------------------------------------------------------- EPS diluted, SEK 0.37 2.76 -87% -1.99 ---------------------------------------------------------------------------- EPS (Non-IFRS), SEK(1)) 0.99 3.14 -68% -1.40 ---------------------------------------------------------------------------- Cash flow from operating activities -3.0 0.7 - 15.7 ---------------------------------------------------------------------------- Net cash, end of period 32.2 37.1 -13% 38.5 -16%--------------------------------------------------------------------------- (1)) EPS, diluted, excl. amortizations, write-downs of acquired intangible assets, and restructuring (2)) Q1 2012 includes a gain from the divestment of Sony Ericsson of SEK 7.7 b.---------------------------------------------------------------------------




COMMENTS FROM HANS VESTBERG, PRESIDENT AND CEO

"Sales showed positive development in the quarter with a growth of 2% YoY,despite currency headwind. Sales for comparable units, adjusted for FX andhedging, grew 7%," said Hans Vestberg, President and CEO of Ericsson(NASDAQ: ERIC).

"The sales increase was primarily driven by Networks and rollout services,following high project activities primarily in Europe and North America.NorthAmerica remained the strongest region and showed a growth of 23% despitethedecline in CDMA. North East Asia had a challenging quarter with lower salesinSouth Korea, which remains one of the most advanced LTE markets but withoutparallel 3G deployments as in Q112, continued structural decline in GSMinvestments in China and FX effects in Japan.

Looking at the areas of portfolio momentum, we see continued gooddevelopment inManaged Services with 21 new contracts signed during the quarter. WithintheMobile Broadband area, the vendor selection processes for 4G/LTE in RussiaandChina have been initiated. We also see continued momentum for our SSRroutingplatform with 12 new contracts in the quarter. Within OSS and BSS demandcontinued to be strong.

At the Mobile World Congress (MWC) in Barcelona the trends in focus verifyourbelief that the Networked Society is coming to life. The growth in datatrafficand video in the networks drives demand for mobile broadband and OSS andBSS.Other key topics at the MWC were software defined networks, cloud andmachine-to-machine communications that will all be part of shaping the industry forthecoming years.

Profitability improved YoY, adjusted for the restructuring charges relatedtothe reduction of operations in Sweden concluded in Q1 and last year's gainfromthe divestment of Sony Ericsson. The improvement is mainly due to highersalesin Networks and a continued reduction in operating expenses, offset bynegativeoperating income in Network Rollout and negative FX effects.

The underlying business mix, with a higher share of coverage projects thancapacity projects, continued as anticipated during the quarter. Withpresentvisibility of customer demand, and current global economic development, wecontinue to believe that the underlying business mix will start tograduallyshift towards more capacity projects during the second half of 2013.

We continue to execute on our strategy. During the quarter we announced thewayforward for our JV ST-Ericsson and in April 2013 we announced our intentiontoacquire Microsoft's Mediaroom to strengthen our media position.

While macroeconomic and political uncertainty continues in certain regions,thelong-term fundamentals in the industry remain attractive and we are wellpositioned to continue to support our customers in a transforming ICTmarket,"concludes Vestberg.

You find the complete report with tables in the attached PDF or byfollowingthis link:

www.ericsson.com/res/investors/docs/q-reports/2013/03month13-en.pdf or goto:

www.ericsson.com/res/investors

NOTES TO EDITORS

Ericsson invites media, investors and analysts to a press conference at theEricsson Studio, Grönlandsgången 4, Stockholm, at 09.00 (CET),April 24, 2013. An analysts, investors and media conference call will beginat 14.00 (CET).

Live webcast of the press conference and conference call as well assupportingslides will be available at www.ericsson.com/press andwww.ericsson.com/investors

Video material will be published during the day onwww.ericsson.com/broadcast_room

Ericsson discloses the information provided herein pursuant to theSecuritiesMarkets Act. The information was submitted for publication at 07.30 CET, onApril 24, 2013.

Ericsson first quarter report 2013:http://hugin.info/1061/R/1695632/558057.pdf


This announcement is distributed by Thomson Reuters on behalf ofThomson Reuters clients. The owner of this announcement warrants that:

(i) the releases contained herein are protected by copyright and other applicable laws; and

(ii) they are solely responsible for the content, accuracy and originality of the information contained therein.

Source: Ericsson via Thomson Reuters ONE

[HUG#1695632]



FOR FURTHER INFORMATION, PLEASE CONTACT

Helena Norrman
Senior Vice President, Communications
Phone: +46 10 719 34 72
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Investors

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Media

Ola Rembe
Vice President, Head of External Communications
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Source: Marketwire