Ericsson reports fourth quarter and full year results
[Ericsson discloses the information provided herein pursuant to the Swedish Securities Exchange and Clearing Operations Act and/or the Swedish Financial Instruments Trading Act. The information was submitted for publication at 07.30 CET, on February 1, 2008.]
Sales SEK 54.5 (54.2) b. full year SEK 187.8 (179.8) b. organic growth 8% in constant currencies
Operating income SEK 7.6 (12.2) b., full year SEK 30.6 (35.8) b.
Operating margin 14% (23%), 16% (20%) for full year
Cash flow from operations SEK 12.0 (11.0) b., SEK 19.2 (18.5) b. full year
Net income SEK 5.6 (9.7) b., full year SEK 21.8 (26.3) b 1)
Earnings per share SEK 0.35 (0.61), SEK 1.37 (1.65) full year 1)
The Board of Directors will propose an unchanged dividend of SEK 0.50 per share
CEO COMMENTS
"During 2007 we continued to strengthen our competitive position," said Carl-Henric Svanberg, President and CEO of Ericsson (NASDAQ:ERIC). We generated an operating income of SEK 30 b. During the autumn we did however experience significant margin erosion in our networks business.
The continued rapid build out of mobile communications in emerging markets and our significant market share gains have resulted in a higher proportion of new network builds with initial lower margins. At the same time, we have seen a decline in network expansions and upgrades in mature markets. All this is resulting in a lower margin. The ongoing shift to new switching technologies, where we now build new footprint, has similar characteristics, which adds to this effect.
The mobile networks market growth slowed during the year. As expected, our sales in the quarter were affected by political unrest in certain emerging markets. Professional services continued to show strong growth with stable margins while Multimedia is in a build-up phase and includes areas with good growth and healthy margins as well as investment areas. Cash flow improved in the fourth quarter leading to a better cash conversion year-over-year.
We have steadily improved our leading position and market share in an increasingly challenging market. Our ambition is to continue to do so, irrespective of market fluctuations. Industry fundamentals and consumer behavior support a positive longer-term outlook. The market growth however slowed during last year and for 2008 we find it prudent to plan for a flattish mobile infrastructure market. We will intensify our operational excellence programs and reduce our cost base to safeguard our competitive position," said Carl-Henric Svanberg.
Click for full press release
Sales SEK 54.5 (54.2) b. full year SEK 187.8 (179.8) b. organic growth 8% in constant currencies
Operating income SEK 7.6 (12.2) b., full year SEK 30.6 (35.8) b.
Operating margin 14% (23%), 16% (20%) for full year
Cash flow from operations SEK 12.0 (11.0) b., SEK 19.2 (18.5) b. full year
Net income SEK 5.6 (9.7) b., full year SEK 21.8 (26.3) b 1)
Earnings per share SEK 0.35 (0.61), SEK 1.37 (1.65) full year 1)
The Board of Directors will propose an unchanged dividend of SEK 0.50 per share
CEO COMMENTS
"During 2007 we continued to strengthen our competitive position," said Carl-Henric Svanberg, President and CEO of Ericsson (NASDAQ:ERIC). We generated an operating income of SEK 30 b. During the autumn we did however experience significant margin erosion in our networks business.
The continued rapid build out of mobile communications in emerging markets and our significant market share gains have resulted in a higher proportion of new network builds with initial lower margins. At the same time, we have seen a decline in network expansions and upgrades in mature markets. All this is resulting in a lower margin. The ongoing shift to new switching technologies, where we now build new footprint, has similar characteristics, which adds to this effect.
The mobile networks market growth slowed during the year. As expected, our sales in the quarter were affected by political unrest in certain emerging markets. Professional services continued to show strong growth with stable margins while Multimedia is in a build-up phase and includes areas with good growth and healthy margins as well as investment areas. Cash flow improved in the fourth quarter leading to a better cash conversion year-over-year.
We have steadily improved our leading position and market share in an increasingly challenging market. Our ambition is to continue to do so, irrespective of market fluctuations. Industry fundamentals and consumer behavior support a positive longer-term outlook. The market growth however slowed during last year and for 2008 we find it prudent to plan for a flattish mobile infrastructure market. We will intensify our operational excellence programs and reduce our cost base to safeguard our competitive position," said Carl-Henric Svanberg.
Click for full press release
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