& cplSiteName &

Ericsson Reports Q1

Light Reading
News Wire Feed
Light Reading
4/23/2014
50%
50%

STOCKHOLM -- First quarter highlights:

  • Sales in the quarter were SEK 47.5 (52.0) b. Sales for comparable units, adjusted for currency, decreased -7% YoY and -28% QoQ
  • Sales declined YoY, primarily in North America and Japan but partly offset by China, Middle East and Latin America
  • Business mix in the quarter was mainly driven by mobile broadband capacity projects. With current visibility, key contracts awarded will gradually impact sales and business mix, mainly in the second half of the year.
  • Operating margin improved YoY in all segments to 5.5% (4.0%) mainly driven by mobile broadband capacity sales and lower restructuring charges
  • Operating income amounted to SEK 2.6 (2.1) b.
  • Cash flow from operating activities was SEK 9.4 b. driven by the payment from Samsung related to the new license agreement as well as reduced trade receivables.

    Comments from Hans Vestberg, President and CEO of Ericsson:

    Sales for comparable units, adjusted for currency, declined by -7% year-over-year, with continued negative impact from North America and Japan. All segments showed margin improvements.

    The main reason behind the decline in sales is, as previously communicated, lower revenues from two large mobile broadband coverage projects in North America, which peaked in the first half of 2013, and the impact from reduced activity in Japan. This was partly offset by growth in China, Middle East and Latin America. The decline in sales impacted segment Networks as well as the Global Services network rollout business.

    Our focus on profitability is paying off with gross margin improvement YoY, both including and excluding restructuring. All segments also showed improved operating margins. The business mix in the quarter was predominantly driven by mobile broadband capacity projects. In addition, some of our customers invested more in software to improve network performance and user experience.

    Operating cash flow amounted to SEK 9.4 b., compared to a negative operating cash flow of SEK -3.0 b. in the first quarter last year. The payment from Samsung, related to IPR licensing, as well as lower sales had a positive effect on cash flow. Our continued efforts to reduce working capital through a better order-to-cash process are progressing well.

    North America is currently characterized by operator investments in capacity and quality enhancements. At the same time we continue to strengthen our position in strategic areas. We are pleased to have been named partner to AT&T for their Domain 2.0 initiative which aims to simplify and scale their network utilizing Network Function Virtualization (NFV) and Software-Defined Networking (SDN).

    In region North East Asia we are executing on previously awarded 4G/LTE contracts in mainland China. In addition, we have been awarded important 4G/LTE contracts in Japan and Taiwan.

    In Europe, we have been awarded a five-year contract as part of Vodafone's Project Spring. It includes upgrades and expansions of Vodafone's 2G and 3G networks, and build-out of 4G/LTE along with professional services.

    There is continued demand for our services offering and in the quarter we have won new managed services business in several regions. With seven additional operators announcing trials of the Ericsson Radio Dot System we see strong interest in the solution. The innovative small-cell indoor solution will be commercially available later this year.

    With current visibility, key contracts awarded will gradually impact sales and business mix, mainly in the second half of the year.

    Political unrest prevails in parts of the Middle East and Africa and is still impacting sales. There is also an increased political uncertainty in Russia and the Ukraine. In 2013 Ericsson had SEK 5.9 b. in sales in Russia and Ukraine. The current political uncertainty has not impacted sales in the first quarter.

    In a transforming ICT market, Ericsson continues to evolve through investments both into its core business and in new and targeted areas. Through our technology and services leadership we are well positioned to continue to stay relevant as our customers move to capture new market opportunities.

    Ericsson AB (Nasdaq: ERIC)

    (0)  | 
    Comment  | 
    Print  | 
  • Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
    Light Reading’s Upskill U is a FREE, interactive, online educational resource that delivers must-have education on themes that relate to the overall business transformation taking place in the communications industry.
    NEXT COURSE
    Wednesday, September 28, 1:00PM EDT
    Gigabit 101
    Will Barkis, Senior Technology Analyst, Orange
    UPCOMING COURSE SCHEDULE
    Friday, September 30, 1:00PM EDT
    Gigabit & the Great Migration
    Robert Howald, Vice President, Network Architecture, Comcast
    Wednesday, October 5, 1:00PM EDT
    Gigabit & Smart Cities
    Joe Kochan, COO & Co-Founder, US Ignite
    Friday, October 7, 1:00PM EDT
    Gigabit & DOCSIS 3.1
    Ty Pearman, Director, Access Architecture, Comcast
    in association with:
    From The Founder
    Light Reading today starts a new voyage as part of a larger Enterprise.
    Flash Poll
    Live Streaming Video
    Charting the CSP's Future
    Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
    LRTV Interviews
    Verizon Takes Next Step on Biz Virtualization Journey

    9|26|16   |   4:38   |   (1) comment


    At September's NFV & Carrier SDN event in Denver, Light Reading sat down with Victoria Lonker, director of Product and New Business Innovation at Verizon, to chat about where the carrier is with delivering virtualized services to business customers.
    LRTV Interviews
    Global Services: The $40B Face-Off

    9|26|16   |   05:53   |   (1) comment


    More service providers than ever before are battling it out to win a slice of what is now a $40 billion global communications services pie, explains Ovum Principal Analyst David Molony.
    LRTV Documentaries
    MEC Congress: The Key Takeaways

    9|22|16   |   03:25   |   (3) comments


    Three key takeaways from the Mobile Edge Computing (MEC) Congress in Munich, Germany.
    Wagner’s Ring
    Time to Shut Up About 'Dumb Pipes'

    9|22|16   |     |   (12) comments


    Service providers can't compete with OTT players. It just isn't in their DNA. Instead, service providers need to embrace what they're good at -- providing reliable, secure connectivity.
    Wagner’s Ring
    Keeping Your Tech Career Going After 50

    9|21|16   |     |   (13) comments


    How do you keep your career moving forward when you're past the half-century mark?
    LRTV Interviews
    Peering Into the Digital Future

    9|20|16   |   04:25   |   (0) comments


    Nick Thomas, practice leader of digital media at Ovum, talks about how digital transformation in the technology, media and telecom sectors will enable the development of a new range of applications and services for enterprises and consumers and how the upcoming Digital Futures event in London will examine ...
    LRTV Custom TV
    Napatech Tackles NFV's Major Challenge

    9|7|16   |   08:42   |   (0) comments


    One of the main challenges for network operators introducing NFV is to combine performance and flexibility in a cost-effective way, but there is a solution, explains Napatech's Dan Joe Barry.
    LRTV Custom TV
    Huawei Optical Innovation 2016

    9|6|16   |     |   (0) comments


    Highlights of the 2016 Huawei Optical Innovation forum.
    LRTV Huawei Video Resource Center
    Are You Ready for Huawei Connect 2016?

    8|31|16   |     |   (0) comments


    Join us for an exclusive sneak peak of Huawei Connect, an integrated conference for the global ICT ecosystem taking place in Shanghai.
    Between the CEOs
    CEO Chat: UXP's Gemini Waghmare

    8|26|16   |     |   (0) comments


    Light Reading CEO Steve Saunders and UXP Systems CEO Gemini Waghmare discuss the strategic importance of digital identity for operators in the midst of transformation.
    LRTV Custom TV
    F5 Virtual Network Function Integrations With Partner Orchestration Platform

    8|24|16   |   6:38   |   (0) comments


    F5's Kishore Patnam, product manager for F5's service provider solutions, discusses why service providers are moving towards virtualization and how his clients are utilizing F5's solutions.
    Between the CEOs
    CEO Chat: Intel's Alexis Black Bjorlin

    8|17|16   |   06:23   |   (0) comments


    Join us for an in-depth interview between Steve Saunders of Light Reading and Alexis Black Bjorlin of Intel as they discuss the release of the company's Silicon Photonics platform, its performance, long-term prospects, customer expectations and much more.
    Upcoming Live Events
    November 3, 2016, The Montcalm Marble Arch, London
    November 30, 2016, The Westin Times Square, New York City
    December 1, 2016, The Westin Times Square, New York, NY
    December 6-8, 2016, The Westin Excelsior, Rome
    May 16-17, 2017, Austin Convention Center, Austin, TX
    All Upcoming Live Events
    Infographics
    Hot Topics
    Keeping Your Tech Career Going After 50
    Mitch Wagner, West Coast Bureau Chief, Light Reading, 9/21/2016
    Time to Shut Up About 'Dumb Pipes'
    Mitch Wagner, West Coast Bureau Chief, Light Reading, 9/22/2016
    Verizon CFO: Eat Our (Fixed) 5G Dust!
    Dan Jones, Mobile Editor, 9/22/2016
    WiCipedia: The Women Helping Women Edition
    Eryn Leavens, Special Features & Copy Editor, 9/23/2016
    Like Us on Facebook
    Twitter Feed
    BETWEEN THE CEOs - Executive Interviews
    Light Reading CEO Steve Saunders and UXP Systems CEO Gemini Waghmare discuss the strategic importance of digital identity for operators in the midst of transformation.
    Join us for an in-depth interview between Steve Saunders of Light Reading and Alexis Black Bjorlin of Intel as they discuss the release of the company's Silicon Photonics platform, its performance, long-term prospects, customer expectations and much more.
    Animals with Phones
    You Thought Your Customer Service Was Unreliable... Click Here
    Live Digital Audio

    A vital part of increasing the number of women in comms is transforming the ways companies can support and empower women. While progressive company policies that support both men and women in achieving work-life balance are a step in the right direction, creating a company culture that supports those policies can at times be more challenging.

    During this show, we'll talk to Lynn Comp, Senior Director of Industry and Sales Enabling (ISE) in the Network Platforms Group at Intel, about why those challenges exist and how companies can overcome them. She'll provide insight into how Intel has worked to create a culture that supports work-life balance, and provide steps and guidance for other companies wishing to do the same. We will also leave plenty of time to get your questions answered live on the air.