Ericsson income up 12 percent in 2011 at SEK 227 billion

By Telecom Lead Team:
infrastructure major Ericsson has clocked SEK 226.9 billion revenue in 2011,
showing 12 percent growth over 2010’s SEK 203.3 billion.


Ericsson’s Q4 2011 income is
up 1 percent to SEK 63.7 billion from SEK 62.8 billion in Q4 2010.


The wireless infrastructure
provider’s full year profit is up 12 percent to SEK 12.6 billion from SEK 11.2
billion in 2010.


Profit in Q4 2011 took a
beating by registering 66 per cent dip at SEK 1.5 billion from SEK 4.4 billion
in Q4 2010.


Recently, Ericsson said that
$316.57 million net loss reported by Sony Ericsson is likely to negatively
impact the financial performance of Ericsson in 2011, a leading telecom
infrastructure and solutions company.


Ericsson to feel the heat as Sony Ericsson reports net loss of
$317 million


“For the full year
2011, we had a strong sales growth and an increase in net income. In the fourth
quarter, however, we saw weaker development in Networks, as well as an expected
gross margin impact from a changed business mix with more coverage projects,
modernization projects in Europe, and a higher services share,” said Hans
Vestberg, president and CEO of Ericsson.


“Group sales in the
quarter were flat year-over-year and grew 15 percent sequentially, which is
weaker than normal in the fourth quarter. The sequential growth is mainly
driven by a strong development of 32 percent in Global Services, while Networks
sales were weak, up only 2 percent. The sales development in Networks is mainly
related to North America and Russia, where the trend continued from the
third quarter with slower operator spending after a period of high investments
in capacity. In addition, we saw some increased operator cautiousness during
the quarter due to uncertainties such as economic development and political
unrest in some countries,” Vetsberg added.


2011 was a year of strong
sales growth of 12 percent, and sales for comparable units, adjusted for
currency exchange rate effects and hedging, increased 19 percent. In spite of
weak JV results, net income increased SEK 1.3 b. to SEK 12.6 b., driven by
higher sales and lower restructuring charges.



Q3 2011 financial performance



posted 17 percent increase in group sales at SEK 55.5 billion in Q3 2011 as
compared with SEK 47.5 billion in Q3 2011.



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