Ericsson Sees Strong Growth in North America, Other Regions Stall

Ericsson reported Q1 2013 net sales of SEK 52.0 billion (US$7.84 billion), down 22% compared to Q4 2012 but up 2% compared to Q1 2012. Operating income, including joint ventures, was SEK 2.1 billion,  with an operating margin of 4.0%.

“Sales showed positive development in the quarter with a growth of 2% YoY, despite currency headwind. Sales for comparable units, adjusted for FX and hedging, grew 7%,” said Hans Vestberg, President and CEO of Ericsson.

“The sales increase was primarily driven by Networks and rollout services, following high project activities primarily in Europe and North America. North America remained the strongest region and showed a growth of 23% despite the decline in CDMA. North East Asia had a challenging quarter with lower sales in South Korea, which remains one of the most advanced LTE markets but without parallel 3G deployments as in Q112, continued structural decline in GSM investments in China and FX effects in Japan,” added Vestberg.

Some highlights:

• Networks sales increased 3% YoY, primarily driven by North America and South East Asia. Networks sales decreased -20% QoQ, partly due to lower sales in North East Asia, offset by continued high business activity in North America.
• Global Services grew 4% YoY, driven by Network Rollout and decreased -24% QoQ, partly due to lower business activity in North East Asia and delays in LTE deployments in Latin America.
• Support Solutions sales declined -19% YoY and -33% QoQ, mainly due to the divestment of Multimedia Brokering (IPX) in Q312 and negative FX effects.
• Restructuring charges for the Group amounted to SEK 1.8 (0.6) b., of which SEK 1.4 b. related to the significant reduction of operations in Sweden.

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