Tags: Ericsson | growth | wireless | ERIC

Ericsson Growth from Global Wireless

By    |   Monday, 07 Nov 2011 01:00 PM

Swedish company LM Ericsson Telephone Company (ERIC) is one of the world's major suppliers of mobile telecom equipment and services. The global nature of Ericsson's business allows it to take advantage of wireless growth in Latin America, Sub-Saharan Africa and China.

LM Ericsson derives the largest portion of revenues from the sales of network equipment. The networks involved are mobile and wireless communication and data networks. The company provides both GSM and CDMA network equipment.

The services segment includes network design, rollout, integration, management and customer services. The third business segment is multimedia, where Ericsson provides business support services, TV content delivery systems and a range of multimedia related applications.

Network equipment sales account for about 60 percent of revenues, services bring in 35 percent, leaving about 15 percent for multimedia and other business ventures. In the first three quarters of 2011, network sales were up by 30 percent but services sales declined by 1 percent, year-over-year.

Wireless equipment growth

For the first nine months of 2011 revenues for LM Ericsson increased 16 percent. Adjusted net income per share climbed by 32 percent. Services sales did recover in the third quarter, up 7 percent year-over-year and 9 percent from the second quarter results.

For the full year 2011, Ericsson is forecast to earn 90 cents per share, up from 71 cents in 2010. The consensus estimate for 2012 is 98 cents per share. ERIC pays a dividend once a year, in April.

The following regions provided the highest percentages of revenue growth from the third quarter of 2010 to the same quarter in 2011: Latin America, up 64 percent; Northern Europe and Central Asia, 49 percent; Sub-Saharan Africa, 40 percent, and China and northeastern Asia, up 39 percent.

North America provides the largest portion sales, at 20 percent of the total with a 6 percent growth rate.

At the end of October, Ericsson and Sony (SNE) announced that Sony would buy Ericsson's half of the Sony Ericsson joint venture to produce and sell cell phones and other communication equipment. Sony will pay approximately $1.5 billion for the Ericsson share.

The company next reports on Jan. 19.

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Swedish company LM Ericsson Telephone Company (ERIC) is one of the world's major suppliers of mobile telecom equipment and services. The global nature of Ericsson's business allows it to take advantage of wireless growth in Latin America, Sub-Saharan Africa and China. LM...
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2011-00-07
Monday, 07 Nov 2011 01:00 PM
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