Wednesday, January 27, 2016

Ericsson: Q4 Sales Flat on Constant Currency as 4G Rollouts in China Recover

Ericsson's Q4 2015 sales increased by 8% YoY to SEK 73.6 (US$8.64 billion).  Sales, adjusted for comparable units and currency, decreased by -1%. Operating margin increased to 15% (9%) YoY with improvements in all segments. The major contributors to the profit improvement were higher IPR licensing revenues and lower operating expenses, mainly in segment Networks.

Some highlights from the quarterly report:

  • In North America, the mobile broadband investments remained stable, with additional hardware sales in the quarter. 
  • 4G deployments in Mainland China recovered after a weak third quarter. 
  • Emerging markets such as India, Indonesia and Mexico remained strong while markets such as Russia, Brazil and parts of the Middle East continued to be weak, mainly due to macro-economic developments. 
  • Investments in Europe were driven by the transition from 3G to 4G and capacity enhancements. Operators increased their investments in telecom core networks, driven by deployment of new service offerings such as VoLTE.
  • In the quarter, sales growth in segment Global Services was mainly driven by growth in Systems Integration and Managed Services while Network Rollout sales declined.
  • Ericsson ended the year with good YoY sales development in TV and Media which contributed to growth in Segment Support Solutions.