Ericsson reports first quarter results 2015
Ericsson, a leading provider of communications technology and services has announced its financial results for the first quarter of 2015. Ericsson highlighted strong sales growth by 13% in the quarter, improved profitability in Global Services, the progression of cost and efficiency program and many more things in its report.
Highlights Points:
- Sales in the quarter increased by 13% reaching SEK 53.5 (47.5) b. Significant currency movements impacted sales positively. Sales, adjusted for comparable units and currency decreased by -6% YoY, driven by slower mobile broadband activity in North America.
- With current visibility we anticipate the fast pace of 4G deployments in Mainland China to continue and the North American mobile broadband business to remain slow in the short term.
- Professional Services had a strong quarter.
- Gross margin decreased YoY to 35.4% (36.5%), due to lower capacity business in North America and continued fast pace of 4G coverage deployments in Mainland China, increased restructuring charges and a higher share of Global Services sales.
- The cost and efficiency program, announced in November 2014, is progressing according to plan. Savings of SEK 9 b. is expected, with full effect during 2017.
- Operating income was SEK 2.1 (2.6) b. Excluding restructuring charges of SEK -0.6 (-0.1) b., the operating income was flat YoY.
- The net currency effect contributed positively to the operating income, despite a negative currency hedge effect of SEK -1.4 (-0.1) b.
- Cash flow from operating activities was SEK -5.9 (9.4) b. mainly due to increased working capital.
| SEK b. | Q1 2015 | Q1 2014 | YoY change | Q4 2014 | QoQ change |
| Net sales | 53.5 | 47.5 | 13% | 68.0 | -21% |
| Sales growth adj. for comparable units and currency | – | – | -6% | – | -28% |
| Gross margin | 35.4% | 36.5% | – | 36.6% | – |
| Operating income | 2.1 | 2.6 | -19% | 6.3 | -66% |
| Operating margin | 4.0% | 5.5% | – | 9.3% | – |
| Net income | 1.5 | 1.7 | -14% | 4.2 | -65% |
| EPS diluted, SEK | 0.40 | 0.65 | -38% | 1.29 | -69% |
| EPS (Non-IFRS), SEK 1) | 0.77 | 0.90 | -14% | 1.71 | -55% |
| Cash flow from operating activities | -5.9 | 9.4 | – | 8.6 | – |
| Net cash, end of period | 15.6 | 43.6 | -64% | 27.6 | -44% |
Hans Vestberg, President and CEO of Ericsson commented, “Sales increased by 13% 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.”
