Q3 report 2014
Ericsson's financial report was released at 07:30 CET on October 24, 2014. On this page you will find: CEO Comments, Press Conference webcast and the Media & Analyst conference call information.
Comments from Hans Vestberg, President and CEO
Reported sales increased by 9% year-over-year and sales for comparable units, adjusted for currency, grew by 3% with stable operating income.
The sales growth year-over-year was mainly driven by the Middle East, China, India and Russia, but was partly offset by lower sales in North America.
Mobile broadband sales increased both year-over-year and quarter-over-quarter as we have started to deliver on previously communicated key contracts. We are executing on 4G/LTE contracts in Mainland China and Taiwan and improving sales in Japan. Furthermore, the investment climate in India continues to improve. Sales in parts of Europe, mainly UK and Germany, showed growth year-over-year while the development in southern Europe continued to be weak.
Sales in North America continued to be driven by operator investments in capacity and quality enhancements. However, business activity slowed down during the quarter as operators currently focus on cash flow optimization.
The momentum for Professional Services continued and generated organic growth in the quarter driven by managed services sales and systems integration. The acquired Red Bee Media was successfully integrated and fully consolidated in the third quarter.
Political unrest prevails in many parts of the world, especially in the Middle East and Northern Africa. The quarter shows that our global footprint, with customer in 180 countries, gives us the scale and strength to manage regional variations.
Profitability showed stable improvement across all segments. This was primarily driven by favorable business mix, higher IPR revenues as well as efficiency enhancements. Operating income was negatively impacted by effects from hedge contracts, higher operating expenses related to modems and the acquired Mediaroom business as well as planned ramp up of investments in IP.
We continue to execute on our strategic agenda; to improve our profitability in the core business in order to invest in targeted areas such as IP networks, Cloud, TV & Media and OSS & BSS. Three important acquisitions were made in the quarter:
MetraTech accelerates our cloud and enterprise billing capabilities within BSSFabrix Systems extends our overall leadership position in TV & MediaMajority stake in Apcera that strengthens our position in enterprise cloud
During the quarter we took the strategic decision to stop all further development of modems and shift some R&D resources from segment Modems to Networks to pursue growth opportunities in the radio business.
Through our technology and services leadership we are well positioned to continue to be a strategic partner to our customers as they move to capture new market opportunities.
Conference call for analysts, investors and media
The conference call for financial analysts, investors and media will began at 14:00 CET (13:00 UK time, 08:00 Eastern Standard Time in the US, and 21:00 local time in Japan). President and CEO Hans Vestberg and CFO Jan Frykhammar will comment on the report and take questions.
A replay of the conference call will be available about one hour after the end time until 11:59pm CET October 31, 2014.
Sweden: +46 8 505 202 94
International/ UK: +44 20 776 964 25
Replay passcode: 1562 1796#
Press conference and live webcast, 9:00 CET
Ericsson held a press briefing, which was live webcasted, started at 09:00 CET on October 24, 2014 at Ericsson Studio, Grönlandsgången 4, Kista.
Ericsson President and CEO Hans Vestberg and CFO Jan Frykhammar commented on the report and answered questions. The press briefing was open to journalists and analysts.
After the Q&A session, Hans Vestberg gave short comments to individual media representatives.
Please note that webcast viewers was not be able to pose questions.