infoTECH Feature

October 24, 2014

Ericsson Exec Comments on Third Quarter Financials

Networking giant Ericsson (News - Alert) today reported financial results for what management called “a good and solid quarter” – in which net sales were 57.6 billion SEK.

The third quarter saw the Swedish company's overall revenues grow 9 percent year over year, and the networks group's profits increased by 13 percent, said Ericsson Networks Head Johan Wibergh (News - Alert), adding that currency loss took a nearly 1 billion SEK bite out of the company's profit this quarter.

China, India, the Middle East, and Russia all contributed to the growth, but Ericsson reported a decrease in sales for the quarter in North America. Noting that Ericsson saw growth in North America in the first two quarters and expects to report strong North America performance for the year, Wibergh said it’s important to look at performance in North America annually rather than just quarterly, as there are seasonal changes in customers’ buying behaviors throughout the year.

In terms of technology, Ericsson in the third quarter saw growth for its mobile broadband solutions, including LTE (News - Alert) and 3G, and its IMS-based solutions, including voice over LTE. In an interview with TMCnet this morning, Wibergh noted that this year saw the official launch of the first commercial VoLTE services.

Ericsson is also seeing strong growth in its billing and operational support systems business, he added, where the company is on a journey to establish itself as a full stack provider. The company, which two years ago bought Telcordia for $1.15 billion, in the third quarter expanded its OSS/BSS resources again via the acquisition of MetraTech (News - Alert) for an undisclosed sum. The acquisition of MetraTech, Ericsson said when the deal was announced in late July, will extend its billing leadership beyond telecom into other important markets such as transport and utilities, and better position it to move on opportunities related to the Internet of Things and as-a-service models.

The third quarter also was notable for Ericsson in light of its launch of a new software subscription model, which Wibergh said offers customers a simplified and predictable model with continual access to the latest available software. 

Edited by Alisen Downey

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