Ericsson profit grows 23% on 4G sales

28 Jan 2016
00:00

Ericsson has reported a 23.4% increase in net profit for 2015 to 13.7 billion kronor ($1.61 billion), thanks to a strong fourth quarter and the impact of ongoing cost cutting efforts.

Sales for the year increased 8% to 246.9 billion kronor, with growth in India, China and North America compensating for declines in Japan, Russia and Brazil.

Intellectual property licensing revenue from Ericsson's global licensing deal with Apple also helped contribute to the year's gains. Total IPR revenues were 14.4 billion kronor, higher than the previously estimated range of 13 billion to 14 billion kronor.

For the fourth quarter, sales grew 8% year-on-year to 73.6 billion kronor, but would have fallen 1% in constant currency terms.

But the deal with Apple and a return to growth in China's 4G equipment market following a weak third quarter contributed to a 67% surge in profit to 7.06 billion.

Ericsson CEO Hans Vestberg commented that the company's network segment recovered during the quarter. “Operators increased their investments in telecom core networks, driven by deployment of new service offerings such as VoLTE,” he said.

“In 2015, we had good progress in all our targeted growth areas and we continued to invest in order to establish leadership... The strategic partnership with Cisco, announced in the quarter, will give us strong end-to-end network solutions with a complete IP portfolio.”

He said that while performance improved in Q4, there is room for further improvement. In 2016 the vendor plans to focus on 4G and 5G business opportunities, targeted growth areas such as software sales as well as cost and efficiency adjustments.

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