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Ericsson reports first quarter results 2015

Ericsson

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:

  1. 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.
  2. 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.
  3. Professional Services had a strong quarter.
  4. 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.
  5. 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.
  6. 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.
  7. The net currency effect contributed positively to the operating income, despite a negative currency hedge effect of SEK -1.4 (-0.1) b.
  8. 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.”

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