Ericsson reported fourth-quarter sales up 1 percent year-on-year to SEK 68.0 billion. Adjusted for comparable units and currency effects, sales declined 2 percent. Ericsson said strong sales growth in the Middle East, Europe and Asia was offset by a continued decline in North America, as US operators focused on conserving cash for acquisitions and the spectrum auction.
Ericsson's operating profit fell 30 percent year-on-year to SEK 6.3 billion, the drop due to an initial licensing payment from Samsung received in Q4 2013. Excluding this, operating profit improved, primarily driven by higher software sales and efficiency enhancements at its core business. This was partly offset by higher operating expenses, related to the planned ramp up of investments in targeted areas, Ericsson said. Net profit was down 35 percent to SEK 4.2 billion or SEK 1.29 per share due to the one-time licensing income the previous year.
Ericsson said it was on track with its strategy outlined in November at its capital markets day, including planned cost reductions for the period to 2017 and the exit of the modem business. The company grew cash flow in 2014 to SEK 18.7 billion from SEK 17.4 the previous year and said it execeeded its cash conversion target of 70 percent. Ericsson increased its dividend for the year by 13 percent to SEK 3.40 per share.
