Ericsson (ERIC) Issues Prelim. Q3 Results; Says Revenue Fell ~14%

October 12, 2016 7:08 AM EDT
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Ericsson (Nasdaq: ERIC) 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.Q316Q315YoY changeQ216QoQ change
Of which Networks23.328.8-19%26.8-13%
Gross income14.520.1-28%17.5-17%
Gross margin28.3%33.9%-32.3%-
Operating expenses-14.1-14.9-6%-14.5-3%
Operating income0.35.1-93%2.8-88%
Of which Networks-0.32.8-109%1.6-116%
Operating income excl. restructuring charges1.66.1-73%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.


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 and, where supporting presentation will also be available.

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