Boston, MA 01/31/2014 (wallstreetpr) – Swedish wireless and telecommunications networking giant Ericsson (ADR) (NASDAQ:ERIC) saw much-needed profits in the fourth quarter of fiscal 2013, recovering from heavy losses seen a year ago. The profits were boosted majorly by a huge patent-based payout from Korean electronics and technology giant Samsung Electronics Co.
Ericsson’s 4Q Earnings Results
While Ericsson (ADR) (NASDAQ:ERIC) net profits stood at $990 million for its recently ended fourth quarter from losses of around $1 billion a year ago, the current profit far trails the consensus analyst estimates of $1.11 billion. The patent payout by Samsung played a significant role bolstering overall net profits by around $0.5 billion. While Ericsson’s gross profit margins rose to about 37% from around 31.1% of the corresponding quarter a year ago and a sequential 32% in the preceding third quarter, the gross profit evaluates to about 32.9% minus the Samsung patent for the fourth quarter.
With overall revenue more or less unchanged at approximately $10.28 billion from the $10.27 billion seen for the corresponding FY2012 quarter and falling short of the analyst expectations of about $10.6 billion, Ericsson (ADR) (NASDAQ:ERIC)confessed that weaker demand and resultant drop in sales orders in its biggest market North America largely impacted its sales revenue, in addition to Japan, where its sales declined due to Japanese telecom operators scaling down upgrades in their networks. Ericsson’s largest market North America saw an overall drop in sales of 19% over the past year. Earnings per share for the fourth quarter were at $0.30 a share, falling from the loss-making $0.31 a share a year before.
The Vestberg-Microsoft angle
Meanwhile, Ericsson CEO Vestberg has reiterated his commitment and continuation as Chief Executive Officer of the global networking conglomerate, brushing aside speculations over his possible switch to global software leader Microsoft Corporation (NASDAQ:MSFT), which apparently has been considering him in the search for its successor to outgoing CEO Steve Ballmer. Ericsson (ADR) (NASDAQ:ERIC) stocks rose 5% to $12.55 on January 30 from their previous $11.95, continuing into the after-hours trade.
