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.
- 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|
|Sales growth adj. for comparable units and currency||–||–||-6%||–||-28%|
|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.”