Ericsson’s First Quarter Sales Grows by 13%, Thanks to ChIndia

Ericsson's-First-Quarter-Sales-Grows-by-13%,-Thanks-to-ChIndia

Hans Vestberg, president and CEO, Ericsson

Ericsson’s first quarter sales in 2015 grew by 13 percent reaching SEK 53.5 billion thanks to China and India.

Significant currency movements impacted sales positively. With current visibility, Ericsson anticipates fast pace of 4G deployments in Mainland China to continue and the North American mobile broadband. Operating income was SEK 2.1 billion excluding restructuring charges of SEK -0.6 billion.

Commenting on the results, Hans Vestberg, president and CEO, Ericsson said, “Sales increased by 13 percent in the quarter. Significant currency movements impacted sales positively and professional services had a strong quarter. Profitability improved in segment global services while it declined in segment Networks due to changed business mix.

In the quarter, sales growth was strong in India and North East Asia. Professional Services sales increased YoY with a continued good global demand for our services offering. Ericsson signed 27 managed services contracts in the quarter, including a major multi-country contract in Europe.

Top 5 Countries in Sales
Countries – Q1, 2014 – Q1, 2015
US – 26% – 23%
China – 5% – 8%
India – 4% – 7%
UK – 3% – 4%
Japan 4% – 3%
Source: Ericsson

As anticipated, segment Networks mobile broadband business in North America continued to be slow in the quarter as operators remained

focused on cash flow optimization in order to finance major acquisitions and spectrum auctions. The decline in North America was partly offset

by a continued fast pace of 4G deployments in Mainland China. As a consequence, the business mix shifted to a higher share of coverage

projects in the quarter.

Operating income declined YoY, primarily driven by lower profitability in segment Networks due to the above mentioned change in business mix

and increased operating expenses. This was partly offset by significantly improved operating income in segment Global Services, mainly driven

by Network Rollout. There were no losses related to the modems business in the quarter.

As a consequence of the ongoing dispute with a major customer, the IPR licensing revenues declined in constant currencies. Reported IPR

revenues were stable in the quarter as a majority of these contracts are in USD.

As part of improving the profitability, we continue to proactively identify efficiency opportunities. The cost and efficiency program is progressing

according to plan. The ambition is to achieve savings of approximately SEK 9 billion, with full effect during 2017.

Leave a Reply

%d bloggers like this: