Ericsson Reports Third Quarter Results 2013

STOCKHOLM, Sweden, Oct. 24, 2013 (GLOBE NEWSWIRE) --
Third quarter highlights  * Sales amounted to SEK 53.0 b, down -3% YoY.  * For comparable units and adjusted for FX, sales increased 3% YoY.  * Operating income incl. JV was SEK 4.2 (3.1) b. with an operating margin of    8.0% (5.7%).  * Net income was SEK 3.0 (2.2) b.  * EPS diluted was SEK 0.90 (0.67). EPS Non-IFRS was SEK 1.31 (1.04).  * Cash flow from operating activities was SEK 1.5 (7.0) b.-------------------------------------------------------------------------------                        Q3     Q3    YoY    Q2    QoQ 9 months         9 months SEK b.               2013 2012   Change  2013 Change     2013         2012(2))------------------------------------------------------------------------------- Net sales            53.0   54.6    -3%  55.3    -4%    160.3            160.8-------------------------------------------------------------------------------      Of which Networks             26.7   26.9    -1%  28.1    -5%     82.9             82.0-------------------------------------------------------------------------------      Of which Global Services      24.0   24.3    -1%  24.9    -4%     70.3             69.0-------------------------------------------------------------------------------      Of which Support Solutions     2.4    3.3   -29%   2.3     1%      7.1              9.8------------------------------------------------------------------------------- Gross margin        32.0%  30.4%      - 32.4%      -    32.1%            31.9%------------------------------------------------------------------------------- Operating income excl JV               4.3    3.7    17%   2.5    71%      8.9             17.4------------------------------------------------------------------------------- Operating margin excl JV              8.1%   6.7%      -  4.5%      -     5.6%            10.8%-------------------------------------------------------------------------------      Networks         10%     5%      -    5%      -       7%               5%-------------------------------------------------------------------------------      Global Services               8%     8%      -    6%      -       6%               6%-------------------------------------------------------------------------------      Support Solutions             -5%    14%      -  -12%      -      -6%               9%------------------------------------------------------------------------------- Operating income incl JV               4.2    3.1    36%   2.5    71%      8.8             14.3------------------------------------------------------------------------------- Operating margin                                                          8.9% incl JV              8.0%   5.7%      -  4.5%      -     5.5%------------------------------------------------------------------------------- Net income            3.0    2.2    38%   1.5    99%      5.7             12.2------------------------------------------------------------------------------- EPS diluted, SEK     0.90   0.67    34%  0.45   100%     1.72             3.77------------------------------------------------------------------------------- EPS (Non-IFRS), SEK(1))              1.31   1.04    26%  0.88    49%     3.19             4.96------------------------------------------------------------------------------- Cash flow from operating activities            1.5    7.0   -79%   4.3   -66%      2.8              6.3------------------------------------------------------------------------------- Net cash, end of                                                          29.0 period               24.7   29.0   -15%  27.4   -10%     24.7------------------------------------------------------------------------------- (1))  EPS, diluted, excl. restructuring, amortizations and write-downs of acquired intangible assets (2))  Including gain from divestment of Sony Ericsson of SEK 7.7 b-------------------------------------------------------------------------------Comments from Hans Vestberg, President and CEO"Sales for comparable units, adjusted for FX, grew 3%. Reported sales wereslightly down YoY, primarily due to continued currency headwind," said HansVestberg, President and CEO of Ericsson (NASDAQ:ERIC)."We are currently seeing sales coming under some pressure. In addition to FX,the major drivers for this development are the two large mobile broadbandcoverage projects, which peaked in North America in the first half of 2013. Wealso saw impact from reduced activity in Japan where we are getting closer tocompletion of a major project.The 4G/LTE tenders in China continue and so far two of the major operators havemade their choices. Despite having insignificant market share for 3G, Ericssonhas been named technology partner for both these operators and we will now buildon this initial footprint.The pace is picking up in the European market with continued WCDMA/LTEinvestments and a major investment announcement by one of the large operators.Ericsson now sees growth in several European markets and margins are alsoimproving as the network modernization projects gradually come to an end and weengage more in new capacity and LTE business.The momentum for Professional Services continued with stable earnings and 59signed managed services contracts year to date. As a result of our continuouswork to implement global processes, methods and tools to increase efficiency,Global Services margins improved during the quarter.Profitability for the group continued to improve YoY, partly offset by currencyheadwind. The improvement was driven by higher gross margin due to less dilutiveimpact from European network modernization and somewhat improved business mix.During the quarter Ericsson has continued to strengthen its market leadership.In September we launched a small-cell product, the Ericsson Radio Dot System,for indoor coverage. The new product opens up new revenue opportunities foroperators and initial customer response has been very positive. In addition, weclosed the acquisition of Mediaroom which places Ericsson as the world's largestIPTV player, by market share.The macroeconomic climate has stabilized in many OECD markets. However,uncertainty still remains in certain parts of the world. The long-termfundamentals in the industry remain attractive and we are well positioned tocontinue to support our customers in a transforming ICT market," concludesVestberg.NOTES TO EDITORSYou find the complete report with tables in the attached PDF or by followingthis link:www.ericsson.com/res/investors/docs/q-reports/2013/09month13-en.pdf or go to:www.ericsson.com/res/investorsEricsson invites media, investors and analysts to a press conference at theEricsson Studio, Grönlandsgången 4, Stockholm, at 09.00 (CET), October24, 2013. An analysts, investors and media conference call will begin at 14.00(CET).Live webcast of the press conference and conference call details, as well assupporting slides, will be available at www.ericsson.com/press andwww.ericsson.com/investorsVideo material will be published during the day onwww.ericsson.com/broadcast_roomFOR FURTHER INFORMATION, PLEASE CONTACTHelena Norrman, Senior Vice President, CommunicationsPhone: +46 10 719 34 72E-mail: media.relations@ericsson.comInvestorsPeter Nyquist, Head of Investor RelationsPhone: +46 10 714 64 49E-mail: peter.nyquist@ericsson.comÅsa Konnbjer, Director, Investor RelationsPhone: +46 10 713 39 28E-mail: asa.konnbjer@ericsson.comStefan Jelvin, Director, Investor RelationsPhone: +46 10 714 20 39E-mail: stefan.jelvin@ericsson.comRikard Tunedal, Director, Investor RelationsPhone: +46 10 714 54 00E-mail: rickard.tunedal@ericsson.comMediaOla Rembe, Vice President, Head of External CommunicationsPhone: +46 10 719 97 27E-mail: media.relations@ericsson.comCorporate CommunicationsPhone: +46 10 719 69 92E-mail: media.relations@ericsson.comEricsson discloses the information provided herein pursuant to the SecuritiesMarkets Act. The information was submitted for publication at 07.30 CET, onOctober 24, 2013.Third quarter report 2013: http://hugin.info/1061/R/1737828/582823.pdf[HUG#1737828]

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