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Ericsson reports worse than expected 1st quarter of 2013

Wednesday, 24 April 2013

Ericsson reported a pre-tax profit of Skr2.1 billion for the first quarter of this year. It's a real fall when compared to the same period last year and worse than expected.

The Swedish telecoms company, Ericsson would not be able to match the profits from the first quarter of last year as was expected. However, profit before tax was 25 percent worse than collective analysts expectations.

The significant gross margin was 32.0 percent. During the same period last year, the gross margin of 33.1 percent in the final quarter of last year it stopped at 31.1 percent.

The Swedish Telecoms company sold goods for Skr52.0 billion, which was only marginally better than the same period last year and below expectations.

"Sales showed positive development in the quarter with a growth of 2 percent year on year, despite currency headwind. Sales for comparable units, adjusted for foreign exchange and hedging, grew 7 percent," said Hans Vestberg, President and CEO of Ericsson.

First quarter highlights

Sales in the quarter were SEK 52.0 b. For comparable units and adjusted for FX and hedging, sales increased 7% YoY and declined -19% QoQ.
Operating income incl. JV was SEK 2.1 b. with an operating margin of 4.0%.

Excluding the restructuring charges related to the reduction of operations in Sweden of SEK 1.4 b. the margin amounted to 6.7%. Last year's margin of 17.8% was positively impacted by a gain of SEK 7.7 b. from the divestment of Sony Ericsson.
Net income was SEK 1.2 (8.8) b.
EPS diluted was SEK 0.37 (2.76). EPS Non-IFRS was SEK 0.99 (3.14).
Cash flow from operating activities was SEK -3.0 b. primarily driven by higher working capital.
Net cash decreased by SEK -6.3 b. QoQ to SEK 32.2 b. mainly due to negative operating cash flow and reclassification of Swedish special payroll taxes of SEK 1.8 b. from Other current liabilities to Pension liabilities

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