Ericsson Profit Misses Forecasts

STOCKHOLM--Swedish wireless network company Ericsson swung back into profit in the fourth quarter from a hefty loss a year earlier, helped by a large patent-related payout from Samsung Electronics Co.,

Net profit was 6.41 billion Swedish kronor ($990 million) in the quarter compared with a year-earlier loss of 6.46 billion kronor, when earnings were hit by a charge related to unwinding the former ST-Ericsson joint venture. The figure was well below analyst forecasts of 7.22 billion kronor.

The patent payout lifted net profit by 3.3 billion kronor and added 4.2 billion kronor to sales.

Revenue was 67 billion kronor, little changed from the 66.94 billion kronor reported in the same quarter last year and below expectations of 69.1 billion kronor.

The company said sales were hit by lower activity in North America, where it has passed the peak of several large mobile broadband coverage projects, as well as reduced overall sales in Japan, where operators have reduced network upgrades.

Overall sales in North America, Ericsson's largest market, fell 19% year-on-year, Ericsson said.

Ericsson's closely watched gross margin was 37.1%, up from 31.1% in the same quarter last year and 32 % in the third quarter. Excluding the impact from the patent deal with Samsung, Ericsson's gross margin was 32.9% in the fourth quarter.

Write to Sven Grundberg at [e-mail]

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