L.M. Ericsson edged out market expectations in its fiscal first-quarter results with a net income of $387 million, showing not only the resilience of the infrastructure business but the company’s strong position as leader in mobile systems.
The net income compares with a loss of $555 million in the year-ago period. Earnings per share were 2 cents compared with a loss of 3 cents per share in the same period last year.
“We have clearly strengthened our market position since last summer,” said Carl-Henric Svanberg, president and chief executive officer of Ericsson. “Our year has started well with a number of contracts in key growth areas. A stronger customer focus, including our commitment to operational excellence, is clearly contributing to this achievement.”
The infrastructure provider said orders rose 22 percent from the same period last year, and its adjusted gross margin leaped 44.7 percent.
In its mobile networks, Ericsson had net sales of $2.75 billion, a drop from the prior quarter of $3.2 billion. The orders, however, increased both sequentially and year over year by 43 percent and 22 percent, respectively, thanks to its GSM and third-generation businesses, according to the company.
“We are a major supplier in close to 50 networks that will be or have been commercially launched by year-end. EDGE plays an important complementary role and continues to grow quickly. Over time we expect most GSM networks to be upgraded with EDGE. In addition, the new Ericsson Expander has been well received as an enabler for communication in rural areas and in developed as well as in high-growth markets,” said Svanberg.
