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Electronics Production | October 20, 2008

Ericsson reports sales increase of 13%

The Swedish mobile phone maker Ericsson has posted strong 3Q results. Sales were up 13% year-over-year, mainly driven by healthy growth in Networks across all regions except Western Europe.

In constant currencies, growth amounted to some 17%. Acquisitions and divestitures had a limited net effect. Gross margin, excluding restructuring charges, amounted to 37.0% (35.6%) and was stable sequentially. The year-over-year improvement reflects a better business mix outside Western Europe and improved margins in Professional Services. Operating expenses, excluding restructuring charges, amounted to SEK 12.9 (12.0) b. in the quarter. Operating expenses decreased sequentially affected by seasonality and some initial effects of the cost adjustments. Operating income, excluding restructuring charges, amounted to SEK 5.7 (5.6) b. in the quarter. Sony Ericsson showed a small profit, excluding restructuring charges. Excluding Sony Ericsson, Group operating margin improved year-over-year to 11.5% (9.0%). Carl-Henric Svanberg, President and CEO of Ericsson, states "During the quarter, sales grew by 13% with strong development in all regions except Western Europe. Our business in the quarter has not been impacted by the financial turmoil. Our customers are generally financially strong. In addition, networks are loaded and traffic shows strong increase. In the present financial turmoil, it is however hard to predict how operators will act and to what extent consumer telecom spending will be affected. We have a positive longer-term view for our industry, however, as we look into 2009, we continue to plan for a flattish market, and we have measures in place also for tougher conditions," he continues.
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