Ericsson announces preliminary Q3, 2016 earnings
October 12 2016 - 1:31AM
- Business result for the third quarter 2016 will
be significantly lower than company expectations. Negative industry
trends from first half 2016, with weaker demand for mobile
broadband, especially in markets with weak macro-economic
environment, have further accelerated.
- Sales declined by -14% YoY to SEK 51.1 (59.2) b.,
driven by slower development in Segment Networks where sales
declined by -19%.
- Gross margin declined to 28% (34%) following
lower volumes in Segment Networks, lower mobile broadband capacity
sales, and higher share of services sales.
- Operating income declined to SEK 0.3 (5.1) b.,
including restructuring charges of SEK 1.3 b.
- Current trends are expected to continue short
term.
- All numbers are preliminary and unaudited.
- Conference call for analysts, investors and media
will be held today, October 12, 09.00 CEST.
- Full report to be published October 21, approx.
07.30 CEST.
Ericsson (NASDAQ:ERIC) today announced that the
business result for the third quarter 2016 will be significantly
lower than company expectations. The negative industry trends from
the first half of 2016 have further accelerated, impacting Q3, 2016
numbers primarily in Segment Networks. The sales decline was mainly
driven by markets with weak macro-economic environment such as
Brazil, Russia and the Middle East, impacting both coverage and
capacity sales in those markets. In addition, capacity sales in
Europe were lower following completion of mobile broadband projects
in 2015.
Jan Frykhammar, President and CEO says: "Our
result is significantly lower than we expected, with a particularly
weak end of the quarter, and deviates from what we previously have
communicated regarding market development. The negative industry
trends have further accelerated affecting primarily Segment
Networks. Continued progress in our cost reduction programs did not
offset the lower sales and gross margin. More in-depth analysis
remains to be done but current trends are expected to continue
short-term. We will continue to drive the ongoing cost program and
implement further reductions in cost of sales to meet the lower
sales volumes."
Key numbers (preliminary and
unaudited)
SEK b. |
Q316 |
Q315 |
YoY change |
Q216 |
QoQ change |
Sales |
51.1 |
59.2 |
-14% |
54.1 |
-6% |
Of which Networks |
23.3 |
28.8 |
-19% |
26.8 |
-13% |
Gross income |
14.5 |
20.1 |
-28% |
17.5 |
-17% |
Gross margin |
28.3% |
33.9% |
- |
32.3% |
- |
Operating expenses |
-14.1 |
-14.9 |
-6% |
-14.5 |
-3% |
Operating income |
0.3 |
5.1 |
-93% |
2.8 |
-88% |
Of which Networks |
-0.3 |
2.8 |
-109% |
1.6 |
-116% |
Operating income excl. restructuring
charges |
1.6 |
6.1 |
-73% |
3.8 |
-58% |
Ericsson will, as previously communicated,
announce its full report for the third quarter 2016 on October 21,
at approximately 07.30 CEST.
CONFERENCE CALL FOR
ANALYSTS, INVESTORS AND JOURNALISTS
Following today's announcement Ericsson will host
a conference call for analysts, investors and journalists starting
at 09.00 CEST (08.00 BST in the UK, 03.00 EDT in the US and 16.00
JST in Japan).
Sweden: +46 (0) 8 5664 2694 (Toll-free Sweden:
0200 883817)
International/UK: +44 203 008 9801 (Toll-free UK: 0808
2370059)
US: +1 646 502 5116 (Toll-free US: 18558315945)
Please call in at least 15
minutes before the conference call begins. With a large number of
callers, it may take some time before you are connected.
Live audio webcast of the conference call is also
available here
Replay of the conference call details will be
available approximately one hour after the call on
www.ericsson.com/press and www.ericsson.com/investors, where
supporting presentation will also be available.
NOTES TO EDITORS
For media kits, backgrounders and high-resolution
photos, please visit www.ericsson.com/press
Ericsson is the driving force
behind the Networked Society - a world leader in communications
technology and services. Our long-term relationships with every
major telecom operator in the world allow people, business and
society to fulfill their potential and create a more sustainable
future.
Our services, software and
infrastructure - especially in mobility, broadband and the
cloud - are enabling the telecom industry and
other sectors to do better business, increase efficiency, improve
the user experience and capture new opportunities.
With approximately 115,000
professionals and customers in 180 countries, we combine global scale with technology and services
leadership. We support networks that connect more than 2.5 billion
subscribers. Forty percent of the world's mobile traffic is carried
over Ericsson networks. And our investments in research and
development ensure that our solutions - and our customers - stay in
front.
Founded in 1876, Ericsson has its
headquarters in Stockholm, Sweden. Net sales in 2015 were SEK 246.9 billion (USD 29.4 billion). Ericsson is
listed on NASDAQ OMX stock exchange in Stockholm and the NASDAQ in
New York.
www.ericsson.com
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FOR FURTHER INFORMATION, PLEASE CONTACT
Peter Nyquist, Head of Investor
Relations
Phone: +46 10 714 64 49
E-mail: peter.nyquist@ericsson.com
Ericsson Corporate Communications
Phone: +46 10 719 69 92
E-mail: media.relations@ericsson.com
Ericsson Investor Relations
Phone: +46 10 719 00 00
E-mail: investor.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 October 12, 2016.
Ericsson announces preliminary Q3,
2016 earnings
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Ericsson via Globenewswire
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