Accessibility Statement Skip Navigation
  • Resources
  • Blog
  • Journalists
  • +44 (0)20 7454 5110
  • Client Login
  • Send a Release
Return to PR Newswire homepage
  • News
  • Products
  • Contact
When typing in this field, a list of search results will appear and be automatically updated as you type.

Searching for your content...

No results found. Please change your search terms and try again.
  • News in Focus
      • Browse News Releases

      • All Public Company News
      • All Multimedia News
      • View All News Releases

      • Regulatory News

      • D/A/CH Regulatory News
      • UK Regulatory News
      • View All Regulatory News

  • Business & Money
      • Auto & Transportation

      • Aerospace & Defense
      • Air Freight
      • Airlines & Aviation
      • Automotive
      • Maritime & Shipbuilding
      • Railroads & Intermodal Transportation
      • Supply Chain/Logistics
      • Transportation, Trucking & Railroad
      • Travel
      • Trucking & Road Transportation
      • View All Auto & Transportation

      • Business Technology

      • Blockchain
      • Broadcast Tech
      • Computer & Electronics
      • Computer Hardware
      • Computer Software
      • Data Analytics
      • Electronic Commerce
      • Electronic Components
      • Electronic Design Automation
      • Financial Technology
      • High Tech Security
      • Internet Technology
      • Nanotechnology
      • Networks
      • Peripherals
      • Semiconductors
      • View All Business Technology

      • Entertain­ment & Media

      • Advertising
      • Art
      • Books
      • Entertainment
      • Film & Motion Picture
      • Magazines
      • Music
      • Publishing & Information Services
      • Radio & Podcast
      • Television
      • View All Entertain­ment & Media

      • Financial Services & Investing

      • Accounting News & Issues
      • Acquisitions, Mergers & Takeovers
      • Banking & Financial Services
      • Bankruptcy
      • Bond & Stock Ratings
      • Conference Call Announcements
      • Contracts
      • Cryptocurrency
      • Dividends
      • Earnings
      • Earnings Forecasts & Projections
      • Financing Agreements
      • Insurance
      • Investments Opinions
      • Joint Ventures
      • Mutual Funds
      • Private Placement
      • Real Estate
      • Restructuring & Recapitalisation
      • Sales Reports
      • Shareholder Activism
      • Shareholder Meetings
      • Stock Offering
      • Stock Split
      • Venture Capital
      • View All Financial Services & Investing

      • General Business

      • Awards
      • Commercial Real Estate
      • Corporate Expansion
      • Earnings
      • Environmental, Social and Governance (ESG)
      • Human Resource & Workforce Management
      • Licensing
      • New Products & Services
      • Obituaries
      • Outsourcing Businesses
      • Overseas Real Estate (non-US)
      • Personnel Announcements
      • Real Estate Transactions
      • Residential Real Estate
      • Small Business Services
      • Socially Responsible Investing
      • Surveys, Polls & Research
      • Trade Show News
      • View All General Business

  • Science & Tech
      • Consumer Technology

      • Artificial Intelligence
      • Blockchain
      • Cloud Computing/Internet of Things
      • Computer Electronics
      • Computer Hardware
      • Computer Software
      • Consumer Electronics
      • Cryptocurrency
      • Data Analytics
      • Electronic Commerce
      • Electronic Gaming
      • Financial Technology
      • Mobile Entertainment
      • Multimedia & Internet
      • Peripherals
      • Social Media
      • STEM (Science, Tech, Engineering, Math)
      • Supply Chain/Logistics
      • Wireless Communications
      • View All Consumer Technology

      • Energy & Natural Resources

      • Alternative Energies
      • Chemical
      • Electrical Utilities
      • Gas
      • General Manufacturing
      • Mining
      • Mining & Metals
      • Oil & Energy
      • Oil & Gas Discoveries
      • Utilities
      • Water Utilities
      • View All Energy & Natural Resources

      • Environ­ment

      • Conservation & Recycling
      • Environmental Issues
      • Environmental Policy
      • Environmental Products & Services
      • Green Technology
      • Natural Disasters
      • View All Environ­ment

      • Heavy Industry & Manufacturing

      • Aerospace & Defence
      • Agriculture
      • Chemical
      • Construction & Building
      • General Manufacturing
      • HVAC (Heating, Ventilation & Air-Conditioning)
      • Machinery
      • Machine Tools, Metalworking & Metallurgy
      • Mining
      • Mining & Metals
      • Paper, Forest Products & Containers
      • Precious Metals
      • Textiles
      • Tobacco
      • View All Heavy Industry & Manufacturing

      • Telecomm­unications

      • Carriers & Services
      • Mobile Entertainment
      • Networks
      • Peripherals
      • Telecommunications Equipment
      • Telecommunications Industry
      • VoIP (Voice over Internet Protocol)
      • Wireless Communications
      • View All Telecomm­unications

  • Lifestyle & Health
      • Consumer Products & Retail

      • Animals & Pets
      • Beers, Wines & Spirits
      • Beverages
      • Bridal Services
      • Cannabis
      • Cosmetics & Personal Care
      • Fashion
      • Food & Beverages
      • Furniture & Furnishings
      • Home Improvement
      • Household, Consumer & Cosmetics
      • Household Products
      • Jewellery
      • Non-Alcoholic Beverages
      • Office Products
      • Organic Food
      • Product Recalls
      • Restaurants
      • Retail
      • Supermarkets
      • Toys
      • View All Consumer Products & Retail

      • Entertain­ment & Media

      • Advertising
      • Art
      • Books
      • Entertainment
      • Film & Motion Picture
      • Magazines
      • Music
      • Publishing & Information Services
      • Radio & Podcast
      • Television
      • View All Entertain­ment & Media

      • Health

      • Biometrics
      • Biotechnology
      • Clinical Trials & Medical Discoveries
      • Dentistry
      • FDA Approval
      • Fitness/Wellness
      • Health Care & Hospitals
      • Health Insurance
      • Infection Control
      • International Medical Approval
      • Medical Equipment
      • Medical Pharmaceuticals
      • Mental Health
      • Pharmaceuticals
      • Supplementary Medicine
      • View All Health

      • Sports

      • General Sports
      • Outdoors, Camping & Hiking
      • Sporting Events
      • Sports Equipment & Accessories
      • View All Sports

      • Travel

      • Amusement Parks & Tourist Attractions
      • Gambling & Casinos
      • Hotels & Resorts
      • Leisure & Tourism
      • Outdoors, Camping & Hiking
      • Passenger Aviation
      • Travel Industry
      • View All Travel

  • Policy & Public Interest
      • Policy & Public Interest

      • Animal Welfare
      • Corporate Social Responsibility
      • Economic News, Trends & Analysis
      • Education
      • Environmental
      • European Government
      • Labour & Union
      • Natural Disasters
      • Not For Profit
      • Public Safety
      • View All Policy & Public Interest

  • People & Culture
      • People & Culture

      • Aboriginal, First Nations & Native American
      • African American
      • Asian American
      • Children
      • Diversity, Equity & Inclusion
      • Hispanic
      • Lesbian, Gay & Bisexual
      • Men's Interest
      • People with Disabilities
      • Religion
      • Senior Citizens
      • Veterans
      • Women
      • View All People & Culture

  • Overview
  • Distribution
  • Paid Placement
  • Multichannel Amplification
  • Disclosure Services
  • SocialBoost
  • Rooms
    • MediaRoom
    • ESG Rooms
  • AI Tools
  • General Enquiries
  • Media Enquiries
  • Partnerships
  • Hamburger menu
  • Cision PR Newswire UK provides press release distribution, targeting, monitoring, and marketing services
  • Send a Release
    • Phone

    • +44 (0)20 7454 5110 from 8 AM - 5:30 PM GMT

    • ALL CONTACT INFO
    • Contact Us

      +44 (0)20 7454 5110
      from 8 AM - 5:30 PM GMT

  • Client Login
  • Send a Release
  • Resources
  • Blog
  • Journalists
  • News in Focus
    • Browse News Releases
    • Regulatory News
  • Business & Money
    • Auto & Transportation
    • Business Technology
    • Entertain­ment & Media
    • Financial Services & Investing
    • General Business
  • Science & Tech
    • Consumer Technology
    • Energy & Natural Resources
    • Environ­ment
    • Heavy Industry & Manufacturing
    • Telecomm­unications
  • Lifestyle & Health
    • Consumer Products & Retail
    • Entertain­ment & Media
    • Health
    • Sports
    • Travel
  • Policy & Public Interest
    • Policy & Public Interest
  • People & Culture
    • People & Culture
  • Client Login
  • Send a Release
  • Resources
  • Blog
  • Journalists
  • Overview
  • Distribution
  • Paid Placement
  • Multichannel Amplification
  • Disclosure Services
  • Cision Communications Cloud®
  • AI Tools
  • Client Login
  • Send a Release
  • Resources
  • Blog
  • Journalists
  • General Enquiries
  • Media Enquiries
  • Partnerships
  • Client Login
  • Send a Release
  • Resources
  • Blog
  • Journalists

Ericsson Reports First Quarter Results 2019


News provided by

Ericsson

17 Apr, 2019, 05:48 GMT

Share this article

Share toX

Share this article

Share toX

STOCKHOLM, April 17, 2019 /PRNewswire/ -- First quarter highlights  

  • Sales were SEK 48.9 (43.4) b. Sales adjusted for comparable units and currency increased by 7% driven by strong growth in North America. Reported sales grew by 13%.
  • Gross margin was 38.4% (34.2%) driven by improvements in Networks and Managed Services.
  • Operating income was SEK 4.9 (-0.3) b. and operating margin was 10.0% (-0.7%). Operating income, excluding restructuring charges of SEK -0.2 b. and certain positive non-recurrent items[1] of SEK 1.6 b. was SEK 3.5 b., which equals to an operating margin of 7.2%.
  • Net income improved to SEK 2.4 (-0.7) b.
  • Free cash flow excluding M&A was SEK 4.1 (0.7) b. Net cash amounted to SEK 36.1 (35.6) b.
  • 51% of MediaKind was divested February 1, 2019. The acquisition of antenna and filter assets from Kathrein is expected to close Q3.

SEK b.

Q1

2019

Q1

2018

YoY

change

Q4

2018

QoQ

change

 

Net sales

48.9

43.4

13%

63.8

-23%

Sales growth adj. for comparable units and currency  

-

-

7%

-

-

Gross margin

38.4%

34.2%

-

25.7%

-

Operating income (loss)

4.9

-0.3

-

-1.9

-

Operating margin

10.0%

-0.7%

-

-2.9%

-

Net income (loss)

2.4

-0.7

-

-6.5

-

EPS diluted SEK

0.70

-0.25

-

-1.99

-

EPS (non-IFRS) SEK[2]

0.80

0.11

-

-0.77

-

Free cash flow excluding M&A

4.1

0.7

-

3.0

37%

Net cash. end of period

36.1

35.6

2%

35.9

1%

Gross margin excluding restructuring charges 

38.5%

35.9%

-

32.0%

-

Operating income (loss) excluding restructuring charges 

5.1

0.9

-

2.6

99%

Operating margin excluding restructuring charges 

10.4%

2.0%

-

4.0%

-

[1]Certain non-recurrent items are; a capital gain related to the divestment of 51% of MediaKind (SEK 0.7 b.), divestment of certain assets in Red Bee Media (SEK 0.1 b.) and a reversal of an earlier provision for impairment of trade receivables following customer payment (SEK 0.7 b.)

[2]EPS diluted, excl. amortizations and write-downs of acquired intangible assets, and excluding restructuring charges. Potential ordinary shares are not considered when their conversion to ordinary shares would increase earnings per share.

Non-IFRS financial measures are reconciled to the most directly reconcilable line items in the financial statements at the end of this report.

Comments from Börje Ekholm, President and CEO of Ericsson (NASDAQ:ERIC)

For the third consecutive quarter we showed organic sales growth[1], this quarter by 7%. Growth was mainly driven by North America. Our strategy, to work with lead customers in lead markets, is generating both 5G business and hands-on experience in 5G rollout and commercialization. To date we have publicly announced commercial 5G deals with 18 named operator customers, which, at the moment, is more than any other vendor.

5G services, including mobility, have been launched in South Korea and North America. While Switzerland has released spectrum allowing Swisscom to offer commercial 5G services, using our equipment, the development in other parts of Europe is considerably slower primarily due to lack of spectrum, poor investment climate and additional uncertainties related to future vendor market access.

Gross margin[2] improved to 38.5% (35.9%) YoY, driven by improvements in segments Networks and Managed Services, and also by the recently signed patent license agreement with OPPO.

Segment Networks had a strong quarter with an organic sales growth[1] of 10% YoY, driven by increased investments in North America. Networks gross margin[2] improved to 43.2% (40.4%) YoY, mainly due to higher hardware capacity sales and IPR revenues. In the quarter we announced our intent to acquire the German company Kathrein's antenna and filters business. This will further expand our capabilities in the advanced active and passive antenna domains, which are growing in importance as 5G evolves.

In Managed Services, sales fell organically[1] by -5% due to headwind from contract exits. In the quarter, our Operations Engine was launched with good response from our customers. Gross margin[2] improved to 17.7% (9.1%) YoY, supported by efficiency gains and customer contract reviews. Excluding a non-recurrent positive effect of SEK 0.7 b. from a customer settlement, the operating margin[2] was 8.6%, exceeding the higher range of our financial target for 2020.

Organic sales[1] in Digital Services were stable YoY. We continue to see a good business momentum for the new portfolio of 5G-ready and cloud-native products, with many important contract wins in the quarter. Gross margin excluding restructuring charges and the BSS provision in Q4 2018[3] was stable QoQ and operating income[2] improved YoY driven by reductions in operating expenses. Gross margin[2] declined YoY as Q1 2018 was supported by a favorable business mix. We continue to execute on our plan to turn the Digital Services business around. Implementation of the revised BSS strategy, announced in January 2019, is progressing well.

Organic sales growth[1] in segment Emerging Business and Other was 38% YoY driven by growth in iconectiv. Gross margin[2] was stable YoY. In the quarter 51% of MediaKind was divested, generating a gain of SEK 0.7 b. In segment Emerging Business and Other we invest in initiatives that aim to scale and help create future business for Ericsson. With the exception of iconectiv, the portfolio is still in an early phase. We are also incurring extra costs as we restructure some of the older innovation investments.

Driven by improved earnings, free cash flow excluding M&A amounted to SEK 4.1 (0.7) b. in the quarter and with a strong cash position we are well positioned to grow the company in a profitable way.

As previously disclosed, we have been voluntarily cooperating since 2013 with an investigation by the United States Securities and Exchange Commission (SEC) and, since 2015, with an investigation by the United States Department of Justice (DOJ) into Ericsson's compliance with the U.S. Foreign Corrupt Practices Act (FCPA). We continue to cooperate with the SEC and the DOJ, and have recently begun settlement discussions. These discussions are in a very early stage and therefore we are not able to estimate their length. Further, as this is an ongoing legal matter we cannot provide any detail. However, based on the current status of the discussions it is our assessment that the resolution of these matters will result in material financial and other measures, the magnitude and impact of which cannot be reliably estimated or ascertained at this time.

As previously communicated, we continue to take strategic contracts and incur costs for 5G field trials and, in addition, by end of 2019 we expect large-scale deployments of 5G to commence in parts of Asia. Combined, this will gradually impact short-term margins but strengthen our position in the long term. The impact of strategic contracts and 5G field trials was limited in Q1. The 5G market is gaining momentum and we are well positioned to capture opportunities. We will continue to make substantial investments in R&D, especially in 5G, automation and AI. This is a key part of our focused strategy to strengthen our long-term business and path to reaching our targets for 2020 and 2022.

Börje Ekholm
President and CEO

[1] Organic sales growth: Sales growth adjusted for comparable units and currency

[2] Excluding restructuring charges

[3] BSS (Business Support Systems) provision in Q4 2018 was SEK 5.9 b.

Planning assumptions going forward

Market related                                                                                                                                              

  • The Radio Access Network (RAN) equipment market is estimated to increase by 3% for full-year 2019 with 2% CAGR for 2018-2023. (Source: Dell'Oro.)

Ericsson related

Net sales

  • Two-year average sales seasonality between Q1 and Q2 is 10%. However, the current sales level in North America is expected to remain, leading to lower effects from seasonality between quarters than normally throughout 2019.
  • The revenues for current IPR licensing contract portfolio is approximately SEK 9 b. on an annual basis.

Gross margin

  • Strategic contracts in Networks, with initially low margins, taken to strengthen the market position, will have a negative impact on gross margins without jeopardizing the 2020 target. The impact was limited in the quarter but is expected to start to impact gross margin in Q2.
  • Large 5G deployments in parts of Asia are expected to commence at the end of 2019 and will impact gross margin negatively in the short term.
  • The share of services sales in North America is expected to gradually increase, impacting gross margin negatively.

Operating expenses

  • Operating expenses typically increase between Q1 and Q2 due to seasonality.
  • Costs for 5G field trials will impact SG&A and will increase in the next few quarters.
  • Networks R&D expenses are expected to flatten out.

Restructuring charges and Tax

  • Restructuring charges for full-year 2019 are estimated to be SEK -3 to -5 b.
  • Tax rate in Q1 2019 was 44%. The rate is a result of forecasted geographical distribution of profits for full-year 2019.

Currency exposure                                               

  • Rule of thumb: A change by 10% of USD to SEK would have an impact of approximately +/-5% on net sales and approximately +/-1 percentage point

NOTES TO EDITORS

You find the complete report with tables in the attached PDF or by following this link https://www.ericsson.com/assets/local/investors/documents/financial-reports-and-filings/interim-reports-archive/2019/3month19-en.pdf or on www.ericsson.com/investors

Conference calls for journalists, analysts and investors 

The company will hold two identical conference calls for journalists, financial analysts and investors. President and CEO Börje Ekholm and CFO Carl Mellander will comment on the report and take questions.

The first conference call will begin at 09:00 CEST (08:00 BST in London, 03:00 EDT in New York and 16:00 JST in Tokyo), and the second at 13:00 CEST (12:00 BST in London, 07:00 EDT in New York and 20:00 JST in Tokyo).

To join the conference call, please phone one of the following numbers:

Sweden: +46(0)-8-56642651 (Toll-free Sweden: 0200-883-685)

International/UK: +44(0)-333-300-0804 (Toll-free UK: 0800-358-9473)

US: +1-631-913-1422 (Toll-free US: +1-855-85-70686)

PIN code: For 09:00 CEST call, 34974927# and for 13:00 CEST call, 33611815#

Please call in at least 15 minutes before the conference call begin. As there is usually a large number of callers, it may take some time before you are connected.

A live audio webcast of the conference call will be available at www.ericsson.com/investors and www.ericsson.com/press 

Replay: 

Replay of the conference calls will be available from about one hour after each has ended until April 24, 2019.

Sweden replay number: +46(0)-8-519-993-85

International replay number: +44(0)-333-300-0819

For 09:00 CEST call, 301284111# and for 13:00 CEST call, 301284117#

FOR FURTHER INFORMATION, PLEASE CONTACT
Peter Nyquist, Head of Investor Relations
Phone: +46-10-714-64-99
E-mail: peter.nyquist@ericsson.com 

Additional contacts

Helena Norrman, Senior Vice President, Marketing and Communications
Phone: +46-10-719-34-72
E-mail: media.relations@ericsson.com

Investors

Åsa Konnbjer, Director, Investor Relations
Phone: +46-10-713-39-28
E-mail: asa.konbjer@ericsson.com

Stefan Jelvin, Director, Investor Relations
Phone: +46-10-714-20-39
E-mail: stefan.jelvin@ericsson.com 

Rikard Tunedal, Director, Investor Relations
Phone: +46-10-714-54-00
E-mail: rikard.tunedal@ericsson.com

Media

Ola Rembe, Vice President, Head of External Communications
Phone: +46-10-719-97-27
E-mail: media.relations@ericsson.com 

Corporate Communications
Phone: +46-10-719-69-92
E-mail: media.relations@ericsson.com

This information is information that Telefonaktiebolaget LM Ericsson is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 07:30 CET on April 17, 2019.  

This information was brought to you by Cision http://news.cision.com

https://news.cision.com/ericsson/r/ericsson-reports-first-quarter-results-2019,c2791051

The following files are available for download:

https://mb.cision.com/Main/15448/2791051/1027606.pdf

PDF

Modal title

Also from this source

Invitation to media and analyst briefing for Ericsson Q2 2025 report

Ericsson's (NASDAQ: ERIC) financial report for the second quarter 2025 will be published at approximately 7:00 AM CEST on July 15, 2025. The company...

EMR June 2025 highlights growing monetization appeal of 5G fixed wireless access

Fixed Wireless Access (FWA) continues to grow in appeal to communications service providers (CSPs) around the world, with the ability to offer...

More Releases From This Source

Explore

Computer & Electronics

Computer & Electronics

Telecommunications Industry

Telecommunications Industry

Telecommunications Equipment

Telecommunications Equipment

Earnings

Earnings

News Releases in Similar Topics

Contact PR Newswire

  • +44 (0)20 7454 5110
    from 8 AM - 5:30 PM GMT
  • General Enquiries
  • Media Enquiries
  • Partnerships

Products

  • Content Distribution
  • Multimedia Services
  • Disclosure Services
  • Cision Communications Cloud®

About

  • About PR Newswire
  • About Cision
  • Partnering Opportunities
  • Careers
  • Accessibility Statement
  • APAC
  • APAC - Simplified Chinese
  • APAC - Traditional Chinese
  • Brazil
  • Canada
  • Czech
  • Denmark
  • Finland
  • France
  • Germany
  • India
  • Indonesia
  • Israel
  • Japan
  • Korea
  • Mexico
  • Middle East
  • Middle East - Arabic
  • Netherlands
  • Norway
  • Poland
  • Portugal
  • Russia
  • Slovakia
  • Spain
  • Sweden
  • United States
  • Vietnam

My Services

  • All News Releases
  • Customer Portal
  • Resources
  • Blog
  • Journalists
  • Data Privacy

Do not sell or share my personal information:

  • Submit via Privacy@cision.com 
  • Call Privacy toll-free: 877-297-8921

Contact PR Newswire

Products

About

My Services
  • All News Releases
  • Customer Portal
  • Resources
  • Blog
  • Journalists
+44 (0)20 7454 5110
from 8 AM - 5:30 PM GMT
  • Terms of Use
  • Privacy Policy
  • Information Security Policy
  • Site Map
  • RSS
  • Cookie Settings
Copyright © 2025 PR Newswire Europe Limited. All Rights Reserved. A Cision company.