Ericsson reported that its net loss for the fourth-quarter was 1.6 billion Swedish kronor, compared to net income of 7 billion kronor in the prior year.
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On a per share basis, net loss was 0.48 kronor, compared to earnings of 2.15 kronor in the previous year.
Börje Ekholm, president and CEO said, "The negative industry trends remained in the fourth quarter.
"However, sales were positively impacted by favorable currency exchange rates combined with hardware deliveries, previously planned for Q1 2017. Profitability declined YoY following lower IPR licensing revenues mainly due to last year's agreement with Apple as well as increased restructuring charges."
The cost and efficiency program is tracking towards target. The execution pace was faster than predicted in the quarter, resulting in full-year restructuring charges of 7.6 billion kronor compared with estimated 5.5 billion kronor-6.5 billion kronor.
The company noted that its board will propose a dividend of 1.00 kronor per share to the AGM, compared to 3.70 kronor per share paid last year.
The board believes that it is prudent to align the dividend level with 2016 earnings adjusted for restructuring charges and the current market outlook.
However, the board expresses confidence in the ongoing actions to improve Ericsson's financial performance, and has the ambition to increase the dividend over time as our performance improves.
Earnings per share for the fourth-quarter, excluding amortizations and write-downs of acquired intangible assets, and excluding restructuring charges, dropped to 0.62 kronor from 2.50 kronor in the prior year.
Operating loss was 0.3 billion kronor, compared to Operating profit of 11.0 billion kronor in the quarter, mainly due to lower IPR licensing revenues, higher restructuring charges and lower gross margin.
Operating income, excluding restructuring charges, decreased to 4.4 billion kronor from the prior year's 11.7 billion kronor, mainly due to lower IPR licensing revenues.
The baseline for current IPR licensing contract portfolio is approximately 7 billion kronor on an annual basis. Smartphone volume growth, agreements with currently unlicensed handset manufacturers and IoT licensing will determine growth opportunities going forward.
The cost and efficiency program, first initiated in November 2014, is tracking to target of an annual run rate of operating expenses, excluding restructuring charges, of 53 billion kronor by second half of 2017.
With current plans, it expects restructuring charges of approximately 3 billion kronor for 2017.
Net sales for the quarter declined about 11 percent to 65.2 billion kronor from the prior year's 73.6 billion, primarily due to the decrease of -5.5 billion kronor in IPR licensing revenues. ■