Ericsson Q4 results lifted by Samsung licensing deal

Ericsson reported stable sales and improved profits in the fourth quarter, helped by its new licensing deal with Samsung. Revenues of SEK 67.0 billion were unchanged year-on-year and included SEK 4.2 billion from the Samsung contract. The company's operating result improved to a profit of SEK 9.1 billion, including SEK 4.2 billion from Samsung and a SEK 0.4 billion charge for the acquisition of Airvana, versus a loss of SEK 3.8 billion a year ago. The operating margin was up across the board, to 17 percent at the Networks division and 8 percent at Global Services. 

Ericsson's net result was a profit of SEK 6.4 billion, reversing a loss of SEK 6.3 billion a year earlier, and Ericsson raised its dividend to SEK 3.00 per share from 2.75 a year ago. Operating cash flow was down slightly to SEK 14.6 billion from SEK 15.7 billion in Q4 2012. 

CEO Hans Vestberg said the company's focus on profitability last year paid off, with an increase in margins and 5 percent annual growth in comparable sales. The business mix started to move towards a higher share of capacity projects than coverage projects, although sales were under pressure in the last quarter, due to a slowdown in Japan and the wind-down of major projects in the US, Ericsson said. Sales are improving in China thanks to LTE contracts, and the company also expects the European market to start to recover, helped by Vodafone's plans for increased investment.