Ericsson third quarter report 2012

Ericsson third quarter report 2012 
STOCKHOLM, SWEDEN -- (Marketwire) -- 10/26/12 --  
* Sales decreased -2% YoY and -1% QoQ. 
* Networks decreased YoY due to weaker sales in parts of Europe,
China, Korea 
and Russia as well as continued decline in CDMA
equipment sales. This was 
partly offset by strong development in
North America. Operating margin was 
stable QoQ. 
* Global Services increased sales 19% YoY. Operating margin
increased QoQ. 
* The underlying business mix, with higher share of coverage
projects than 
capacity projects, is expected to prevail
short-term. 
* Operating margin decreased YoY due to higher share of coverage
projects and 
modernization projects in Europe. QoQ operating
margin increased due to     lower opex. 
* Cash flow from operations SEK 7.0 b. and cash conversion YTD at
52%. 
* Net income SEK 2.2 b., down from SEK 3.8 b. YoY, impacted by
lower     profitability in Networks. 
* EPS diluted SEK 0.67 (1.18). EPS Non-IFRS SEK 1.04 (1.52). 


 
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                              Q3    Q3    YoY    Q2    QoQ Nine m.  Nine m.
 SEK b.                    2012   2011 Change  2012 Change    2012     2011
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 Net sales                  54.6  55.5    -2%  55.3    -1%   160.8    163.3
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 Of which Networks          26.9  32.5   -17%  27.8    -3%    82.0     99.1
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 Of which Global Services   24.3  20.4    19%  24.1     1%    69.0     56.9
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 Of which Support
 Solutions                   3.3   2.6    29%   3.5    -5%     9.8      7.2
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 Gross margin              30.4% 35.0%      - 32.0%      -   31.9%    37.1%
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 EBITA margin excl JVs and
 Sony Ericsson sale         8.7% 13.4%      -  8.0%      -    8.2%    13.0%
 
 Operating income excl JVs
 and Sony Ericsson sale      3.7   6.3   -42%   3.3    11%     9.7     17.6
 
 Operating margin excl JVs
 and Sony Ericsson sale     6.7% 11.3%      -  5.9%      -    6.1%    10.8%
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 EBITA margin excl JVs      8.7% 13.4%      -  8.0%      -   13.0%    13.0%
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 Operating income excl JVs
                             3.7   6.3   -42%   3.3    11%    17.4     17.6
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 Operating margin excl JVs  6.7% 11.3%      -  5.9%      -   10.8%    10.8%
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 Of which Networks            5%   13%      -    5%      -      5%      15%
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 Of which Global Services     8%    9%      -    6%      -      6%       7%
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 Of which Support
 Solutions                   14%    3%      -   12%      -      9%      -7%
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 Operating income incl JVs   3.1   5.7   -45%   2.1    49%    14.3     15.7
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 Income after financial
 items                       3.2   5.9   -45%   1.8    81%    14.1     16.3
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 Net income                  2.2   3.8   -42%   1.2    81%    12.2     11.1
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 EPS diluted, SEK           0.67  1.18   -43%  0.34    97%    3.77     3.42
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 EPS (Non-IFRS), SEK(1))    1.04  1.52   -32%  0.78    33%    4.96     4.73
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 Cash flow from operations   7.0   1.6      -  -1.4      -     6.3      4.5
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 Cash conversion            149%   24%      -  -43%      -     52%      25%
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 Net cash, end of period    29.0  35.4   -18%  25.9    12%    29.0     35.4
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 (1)  EPS, diluted, excl. amortizations, write-downs of acquired intangible
      assets and restructuring. Nine months 2012 includes a gain from the
      divestment of Sony Ericsson of SEK 7.7 b.
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Comments from Hans Vestberg, President and CEO 
"Demand for Global Services and Support Solutions continued to be
good, while
Networks showed a decline in sales YoY. In North America
Networks sales developed favorably, despite the expected decline in
CDMA sales, while parts of Europe, China, Korea and Russia continued
to be slow," says Hans Vestberg, President and CEO of Ericsson
(NASDAQ: ERIC). "The growing Global Services business contributes not
only with topline but also with stable operating profitability and,
together with Support Solutions, represented more than 50% of Group
sales. 
We believe that the fundamentals for longer-term positive development
for the
industry remain solid. There are now one billion smartphones
in the world and
the number is expected to reach three billion in
2017. The introduction of new
devices and applications put higher
consumer demands on network performance and
quality. This drives
demand for our technology, software and services capabilities.
However, at the same time, we see a continued macroeconomic slow
down
and political unrest in parts of the world, which has led to more
cautious
operator spending in some parts of the world. 
Our joint venture ST-Ericsson is still in a challenging situation
although performance improved in the quarter. Ericsson, together with
STMicroelectronics,
is continuously reviewing the strategy and
business case. We remain confident
that ST-Ericsson has a strategic
position in the industry to enable the device
ecosystem. 
We have a strong portfolio, position and capabilities in place.
However, our
profitability is not satisfactory. Operating expenses for
comparable units have
declined -7% YoY and we also see steady
improvements in execution of projects.
These improvements are
encouraging, but not enough and we will continue to proactively
identify and execute additional efficiency gains and cost
reductions," concludes Vestberg. 
You find the complete report with tables in the attached PDF or by
following
this link:
www.ericsson.com/res/investors/docs/q-reports/2012/9month12-en.pdf 
Editor's note 
To read the complete report with tables, please go to:
www.ericsson.com/res/investors/docs/q-reports/2012/9month12-en.pdf 
Ericsson invites media, investors and analysts to a press conference
at the Ericsson Studio, Groenlandsgangen 4, Stockholm, at 09.00
(CET), October 26, 2012. An analysts, investors and media conference
call will begin at 14.00 (CET). 
Live webcast of the press conference and conference call as well as
supporting
slides will be available at www.ericsson.com/press and
www.ericsson.c
om/investors 
Video material will be published during the day on
www.ericsson.com/broadcast_room 
Ericsson discloses the information provided herein pursuant to the
Securities
Markets Act. The information was submitted for publication
at 07.30 CET, on October 26, 2012. 
Third quarter report 2012:
http://hugin.info/1061/R/1652649/533557.pdf 
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contained therein. 
Source: Ericsson via Thomson Reuters ONE 
[HUG#1652649] 
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Phone: +46 10 719 3472
E-mail: investor.relations@ericsson.com or media.relations@ericsson.com 
Investors 
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Head of Investor and Analyst Relations
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E-mail: investor.relations@ericsson.com 
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