Tuesday, April 24, 2012

Ericsson Sees LTE Strength in North America While Europe Waits

Ericsson reported Q1 2012 revenue of SEK 51.0 billion (US$7.59 billion), down 4% YoY, impacted by an expected major decline in CDMA sales as well as lower operator network spending in regions with macro-economic or political uncertainty. Net income was SEK 8.8 billion (US$1.31 billion). Global Services and consolidation of Telcordia contributed positively.

"Sales of high-performance mobile broadband developed well in North America, Japan and Korea, while other regions such as Europe including Russia, parts of Middle East and India were weaker,�? says Hans Vestberg, President and CEO of Ericsson. “CDMA continued its expected decline in the transition to LTE. Our services business showed continued momentum where especially Professional Services developed favorably. Support Solutions (former Multimedia) increased organic sales.

Some highlights:

Telcordia’s sales were SEK 0.9 b. in the quarter.

Networks declined compared to Q111, impacted by continued business trends from H211 as well as a major decrease in CDMA sales.

Sales in CDMA decreased 40% YoY.

In North America, strong HSPA capacity sales and a continued build-out of 4G/LTE coverage more than offset the major decline in CDMA sales.

Ericsson recently signed its 50th contract for Evolved Packet Core.

The Antenna Integrated radio, which is part of the RBS6000 family, is now ready for volume deployment.

The new SSR 8020 IP router is now in commercial operation.

Global Services continued to show good momentum with a growth of 18% YoY, with especially good development in Professional Services.

Global Services represented 40% (33%) of total sales in the quarter.

In Western and Central Europe, networks sales were impacted by cautious operator spending, partly offset by network modernization projects. New managed services business is driving the YoY growth in Global Services.