Friday, October 24, 2014

Ericsson Sees Q3 Sales Growth from LTE in Asia

Ericsson reported Q3 2014 sales of SEK 57.6 billion (US$7.94 billion), a growth of 9% YoY and 5% QoQ. Sales for comparable units, adjusted for currency, grew by 3% YoY and 2% QoQ.

The company said sales growth was mainly driven by the Middle East, China, India and Russia, but was partly offset by lower sales in North America.

Some highlights:

  • Gross margin increased YoY to 35.2% (32.0%), driven by improved business mix, higher IPR revenues and lower restructuring charges
  • Ericsson delivered on 4G/LTE contracts in Mainland China and Taiwan and saw improving sales in Japan. 
  • The investment climate in India continues to improve. 
  • Sales in parts of Europe, mainly UK and Germany, showed growth year-over-year while the development in southern Europe continued to be weak.
  • Sales in North America continued to be driven by operator investments in capacity and quality enhancements. However, business activity slowed down during the quarter as operators currently focus on cash flow optimization.
  • The momentum for Professional Services continued and generated organic growth in the quarter driven by managed services sales and systems integration. 
  • During Q3, Ericsson signed 14 new contracts for its SSR 8000 multi-application IP router, of which 6 were for fixed networks.  This brings the number of SSR contracts to 134 since the platform launched in December 2011.
  • Global Services operating margin declined slightly YoY negatively impacted by revaluation of hedge contracts.

See also