April 24, 2013 01:48 ET

Ericsson reports first quarter results 2013

STOCKHOLM, SWEDEN--(Marketwired - Apr 24, 2013) -

First quarter highlights

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

* Operating income incl. JV was SEK 2.1 b. with an operating margin of 4.0%. Excluding the restructuring charges related to the reduction of operations in Sweden of SEK 1.4 b. the margin amounted to 6.7%. Last year's margin of 17.8% was positively impacted by a gain of SEK 7.7 b. from the divestment 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 to negative operating cash flow and reclassification of Swedish special payroll taxes 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.


"Sales showed positive development in the quarter with a growth of 2% YoY, despite currency headwind. Sales for comparable units, adjusted for FX and hedging, 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. North America remained the strongest region and showed a growth of 23% despite the decline in CDMA. North East Asia had a challenging quarter with lower sales in South Korea, which remains one of the most advanced LTE markets but without parallel 3G deployments as in Q112, continued structural decline in GSM investments in China and FX effects in Japan.

Looking at the areas of portfolio momentum, we see continued good development in Managed Services with 21 new contracts signed during the quarter. Within the Mobile Broadband area, the vendor selection processes for 4G/LTE in Russia and China have been initiated. We also see continued momentum for our SSR routing platform with 12 new contracts in the quarter. Within OSS and BSS demand continued to be strong.

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

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

The underlying business mix, with a higher share of coverage projects than capacity projects, continued as anticipated during the quarter. With present visibility of customer demand, and current global economic development, we continue to believe that the underlying business mix will start to gradually shift towards more capacity projects during the second half of 2013.

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

While macroeconomic and political uncertainty continues in certain regions, the long-term fundamentals in the industry remain attractive and we are well positioned to continue to support our customers in a transforming ICT market," concludes Vestberg.

You find the complete report with tables in the attached PDF or by following this link: or go to:


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

Live webcast of the press conference and conference call as well as supporting slides will be available at and

Video material will be published during the day on

Ericsson discloses the information provided herein pursuant to the Securities Markets Act. The information was submitted for publication at 07.30 CET, on April 24, 2013.

Ericsson first quarter report 2013:

This announcement is distributed by Thomson Reuters on behalf of Thomson 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


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