Ericsson reports strong fourth quarter
•Sales SEK 67.0 (54.5) b., up 23%, full year SEK 208.9 (187.8) b., up 11%
•Operating income 1) 2) SEK 9.2 (7.6) b., full year SEK 23.9 (30.6) b.
•Operating margin 1) 2) 13.7% (14.0%), full year 11.4% (16.3%)
•Cash flow SEK 7.0 (12.0) b., full year SEK 24.0 (19.2) b.
•Net income 2) 3) SEK 4.1 (5.8) b., full year SEK 11.7 (22.1) b.
•Earnings per share 2) 3) 4) SEK 1.21 (1.77), full year SEK 3.52 (6.84)
•Board of Directors proposes dividend of SEK 1,85 per share
1) Excluding restructuring charges of SEK 3.0 b. in the quarter and SEK 7.6 b. for the full year
2) Including capital gains of SEK 0.2 b. in first quarter and SEK 0.8 b. in fourth quarter 2008
3) Attributable to stockholders of the Parent Company, excluding minority interests
4) A reverse split 1:5 was made in June 2008, comparable figures restated accordingly
CEO COMMENTS
"We have had a solid performance in 2008," said Carl-Henric Svanberg, President and CEO of Ericsson (NASDAQ:ERIC). "Sales grew by 11% with good demand for our entire portfolio and across the world. Changes in currency rates had very small effect on full year growth. Professional services have continued to show strong growth. Operating margins, excluding Sony Ericsson, have steadily improved, and our financial position is strong with net cash of SEK 35 b. Sony Ericsson is affected by the economic downturn and the declining demand in the consumer market and has taken necessary actions.
During the year, we saw some 650 million new mobile subscriptions and the 4 billion milestone is now reached. 2008 was also a breakthrough year for mobile broadband. Communication is a basic human need. It plays a critical role in the development of a sustainable and prosperous society, and the positive long-term prospects for the industry remain.
The economic recession is spreading across the world. The effects on the global mobile network market should not be that significant as most operators have healthy financial positions, there is a strong traffic growth and the networks are fairly loaded. It remains, however, difficult to more precisely predict to what extent consumer telecom spending will be affected and how operators will act. To date, our infrastructure business is hardly impacted at all, but it would be unreasonable to think that this would be the case also throughout 2009.
We have exceeded our cost reduction targets launched in 2008. In the present environment, we will continue to reduce costs, across all parts of the company at the same pace as in 2008 with restructuring charges of SEK 6-7 b., targeting annual savings of SEK 10 b. from the second half of 2010. We are leveraging synergies between our different technologies and taking advantage of opportunities in the transformation to all-IP networks. As the savings largely are the result of more efficient ways of working, our strategy will remain intact and our unique capabilities should not be affected," concluded Carl-Henric Svanberg.
Click to read the full press release
•Operating income 1) 2) SEK 9.2 (7.6) b., full year SEK 23.9 (30.6) b.
•Operating margin 1) 2) 13.7% (14.0%), full year 11.4% (16.3%)
•Cash flow SEK 7.0 (12.0) b., full year SEK 24.0 (19.2) b.
•Net income 2) 3) SEK 4.1 (5.8) b., full year SEK 11.7 (22.1) b.
•Earnings per share 2) 3) 4) SEK 1.21 (1.77), full year SEK 3.52 (6.84)
•Board of Directors proposes dividend of SEK 1,85 per share
1) Excluding restructuring charges of SEK 3.0 b. in the quarter and SEK 7.6 b. for the full year
2) Including capital gains of SEK 0.2 b. in first quarter and SEK 0.8 b. in fourth quarter 2008
3) Attributable to stockholders of the Parent Company, excluding minority interests
4) A reverse split 1:5 was made in June 2008, comparable figures restated accordingly
CEO COMMENTS
"We have had a solid performance in 2008," said Carl-Henric Svanberg, President and CEO of Ericsson (NASDAQ:ERIC). "Sales grew by 11% with good demand for our entire portfolio and across the world. Changes in currency rates had very small effect on full year growth. Professional services have continued to show strong growth. Operating margins, excluding Sony Ericsson, have steadily improved, and our financial position is strong with net cash of SEK 35 b. Sony Ericsson is affected by the economic downturn and the declining demand in the consumer market and has taken necessary actions.
During the year, we saw some 650 million new mobile subscriptions and the 4 billion milestone is now reached. 2008 was also a breakthrough year for mobile broadband. Communication is a basic human need. It plays a critical role in the development of a sustainable and prosperous society, and the positive long-term prospects for the industry remain.
The economic recession is spreading across the world. The effects on the global mobile network market should not be that significant as most operators have healthy financial positions, there is a strong traffic growth and the networks are fairly loaded. It remains, however, difficult to more precisely predict to what extent consumer telecom spending will be affected and how operators will act. To date, our infrastructure business is hardly impacted at all, but it would be unreasonable to think that this would be the case also throughout 2009.
We have exceeded our cost reduction targets launched in 2008. In the present environment, we will continue to reduce costs, across all parts of the company at the same pace as in 2008 with restructuring charges of SEK 6-7 b., targeting annual savings of SEK 10 b. from the second half of 2010. We are leveraging synergies between our different technologies and taking advantage of opportunities in the transformation to all-IP networks. As the savings largely are the result of more efficient ways of working, our strategy will remain intact and our unique capabilities should not be affected," concluded Carl-Henric Svanberg.
Click to read the full press release
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