SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 6-K

 

 

REPORT OF FOREIGN ISSUER

Pursuant to Rule 13a-16 or 15d-16 of

the Securities Exchange Act of 1934

April 23, 2008

 

 

LM ERICSSON TELEPHONE COMPANY

(Translation of registrant’s name into English)

 

 

Torshamnsgatan 23, Kista

SE-164 83, Stockholm, Sweden

(Address of principal executive offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F  x    Form 40-F  ¨

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.    Yes  ¨    No  x

Announcement of LM Ericsson Telephone company, dated April 23, 2008 “Sony Ericsson continues to invest for future growth.”

 

 

 

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		Press Release April 23, 2008

Sony Ericsson continues to invest for future growth

Q1 Highlights:

 

•

Year-on-year volume growth of 2%

 

•

Income before taxes at higher end of forecast

 

•

R&D investment continues to expand portfolio and addressable market

 

•

New sub-brand XPERIA™ added to portfolio

The consolidated financial summary for Sony Ericsson Mobile Communications AB (Sony Ericsson) for the first quarter ended March 31, 2008 is as follows:

 

		Q1 2007			Q4 2007			Q1 2008
Number of units shipped (million)		21.8			30.8			22.3
Sales (Euro m.)		2,925			3,771			2,702
Gross margin (%)		30.3	%		31.8	%		29.2	%
Operating income (Euro m.)		346			489			181
Operating income (%)		11.8	%		13.0	%		6.7	%
Income before taxes (Euro m.)		362			501			193
Net income (Euro m.)		254			373			133
Average sales price (Euro)		134			123			121

Units shipped in the quarter were 22.3 million, a 2% increase compared to the same period last year and in line with our March 19, 2008 interim announcement of 22 million units. Sales for the quarter were Euro 2,702 million, a decrease of 8% on a year ago due to slowing market growth in mid-to-high end phones in markets where Sony Ericsson has a strong presence. Gross margin was one percentage point lower than Q1 2007, reflecting a less favourable product mix. Income before taxes for the quarter was Euro 193 million, which was at the higher end of the range (Euro 150-200 million) we announced on March 19, 2008. This represented a decrease of 47% compared with a year ago, due to higher R&D investments as a percentage of sales, and reflecting that Q1 2007 was a particularly strong first quarter for the company. Net income for the quarter was 48% lower, at Euro 133 million.

“Sony Ericsson continues to invest in expanding its product portfolio to appeal to a wider variety of consumers in both new and existing markets,” said Dick Komiyama, President, Sony Ericsson. “Our product announcements during the first quarter have been well received by the industry, and we expect to see a positive effect from these announcements during the second half of 2008.”

During the quarter, Sony Ericsson added a new sub-brand to its product portfolio with the announcement of the XPERIA™ X1, a high-end multi-media convergence phone based on Windows Mobile^®, which will launch in the second half of the year. In addition, the company announced a number of new phones during the quarter to increase the appeal of its brand to a broader audience. These included new high-end Walkman^® and HSDPA web phones, such as the W980, W760, Z770 models and also added to its cutting-edge Cyber-shot™ range with models such as the C702 and C902.

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Average selling price (ASP) decreased both sequentially and year-on-year due to the impact of softer sales of high-to-mid end models in key markets. Market share for the quarter is estimated to be around 8%, down one percentage point sequentially.

Sony Ericsson made a dividend payment of Euro 470 million during the quarter to the parent companies. A second dividend payment will be made this year.

Sony Ericsson forecasts that the global handset market for 2008 will grow at a rate of around 10% from more than 1.1 billion units in 2007. The majority of this growth is expected to be in emerging markets.

XPERIA™ is a trademark of Sony Ericsson Mobile Communications

WALKMAN^® and Cyber-shot™ are trademarks or registered trademarks of Sony Corporation

Microsoft and Windows Mobile^® are trademarks of Microsoft Corporation

EDITOR’S NOTES:

Financial statements and additional information:

Financial statements:

Consolidated income statement

Consolidated income statement – isolated quarters

Consolidated balance sheet

Consolidated statement of cash flows

Consolidated statement of cash flows – isolated quarters

Additional information:

Net sales by market area by quarter

- ENDS -

Having sold over 100 million phones in 2007, Sony Ericsson is currently one of the five largest mobile phone manufacturers in the world. An important industry player operating in over 80 countries, our phones, accessories and PC cards are synonymous with innovation and style. With R&D sites in Europe, Japan, China, India and North America, diversity is one of the core strengths of the company. Sony Ericsson was established as a 50:50 joint venture by Sony and Ericsson in October 2001, with global corporate functions located in London. For more information about Sony Ericsson please visit www.sonyericsson.com

CONTACTS:

Investors / Analysts

Ericsson Investor Relations

Gary Pinkham (Stockholm) +46 8 719 0858

Sony Investor Relations

Shinji Tomita (London) +44 20 7444 9713

Tatsuyuki Sonoda (Tokyo) +81 3 6748 2180

Press / Media

Sony Ericsson Global Communications and PR

Aldo Liguori (London) +44 20 8762 5860

Merran Wrigley (London) +44 20 8762 5862

This press release contains forward-looking statements that involve inherent risks and uncertainties. We have identified certain important factors that may cause actual results to differ materially from those contained in such forward-looking statements. For a detailed description of risk factors see Sony’s and Ericsson’s filings with the US Securities and Exchange Commission, particularly each company’s latest published Annual Report on Form 20-F.

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Sony Ericsson

CONSOLIDATED INCOME STATEMENT

 

		Jan-Mar
EUR million		2008			2007			Change
Net sales		2,702			2,925			-8	%
Cost of sales		-1,914			-2,039			-6	%
Gross profit		788			886			-11	%
Gross margin %		29.2	%		30.3	%		-1	%
Research and development expenses		-339			-261			30	%
Selling and administrative expenses		-270			-284			-5	%
Operating expenses		-610			-545			12	%
Other operating income, net		3			5			-36	%
Operating income		181			346			-48	%
Operating margin %		6.7	%		11.8	%		-5	%
Financial income		22			18			24	%
Financial expenses		-10			-2			—
Income after financial items		193			362			-47	%
Taxes		-57			-100			-43	%
Minority interest		-3			-9			-63	%
Net income		133			254			-48	%
Number of units shipped (million)		22.3			21.8			2	%
ASP (EUR)		121			134			-10	%

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Sony Ericsson

CONSOLIDATED INCOME STATEMENT - ISOLATED QUARTERS

 

		2008			2007
EUR million		Q1			Q4			Q3			Q2			Q1
Net sales		2,702			3,771			3,108			3,112			2,925
Cost of sales		-1,914			-2,573			-2,154			-2,192			-2,039
Gross profit		788			1,198			954			921			886
Gross margin %		29.2	%		31.8	%		30.7	%		29.6	%		30.3	%
Research and development expenses		-339			-349			-280			-283			-261
Selling and administrative expenses		-270			-375			-280			-321			-284
Operating expenses		-610			-724			-560			-604			-545
Other operating income, net		3			15			-1			-2			5
Operating income		181			489			393			315			346
Operating margin %		6.7	%		13.0	%		12.7	%		10.1	%		11.8	%
Financial income		22			19			7			18			18
Financial expenses		-10			-7			-16			-6			-2
Income after financial items		193			501			384			327			362
Taxes		-57			-118			-109			-97			-100
Minority interest		-3			-10			-8			-10			-9
Net income		133			373			267			220			254
Number of units shipped (million)		22.3			30.8			25.9			24.9			21.8
ASP (EUR)		121			123			120			125			134

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Sony Ericsson

CONSOLIDATED BALANCE SHEET

 

EUR million		Mar 31 2008		Dec 31 2007		Mar 31 2007
ASSETS
Total fixed and financial assets		594		572		495
Current assets
Inventories		484		437		498
Accounts receivables		1,710		1,870		1,566
Other assets		369		345		859
Other short-term cash investments		1,106		1,431		1,376
Cash and bank		605		724		668
Total current assets		4,274		4,808		4,968
Total assets		4,868		5,380		5,463
SHAREHOLDERS’ EQUITY AND LIABILITIES
Shareholders’ equity		1,665		2,026		2,033
Minority interest		69		64		55
Total equity		1,734		2,090		2,088
Total long-term liabilities		25		26		22
Accounts payable		1,228		1,263		1,316
Other current liabilities		1,880		2,001		2,037
Total current liabilities		3,108		3,264		3,353
Total shareholders’ equity and liabilities		4,868		5,380		5,463
Net cash*		1,703		2,155		2,045

 

*	Net cash is defined as cash and bank plus short-term cash investments less interest bearing liabilities.

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Sony Ericsson

CONSOLIDATED STATEMENT OF CASH FLOWS

 

		Jan-Mar
EUR million		2008		2007
OPERATIONS
Net income		133		254
Adjustments to reconcile net income to cash		31		28
		164		282
Changes in operating net assets		-101		-454
Cash flow from operating activities		64		-172
INVESTMENTS
Investing activities		-22		-53
Cash flow from investing activities		-22		-53
FINANCING
Financing activities		- 462		- 1
Cash flow from financing activities		-462		-1
Net change in cash		-421		-226
Cash, beginning of period		2,155		2,273
Translation difference in Cash		-24		-2
Cash, end of period		1,711		2,045

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Sony Ericsson

CONSOLIDATED STATEMENT OF CASH FLOWS - ISOLATED QUARTERS

 

EUR million		Jan-Mar 2008		Oct-Dec 2007		Jul-Sep 2007		Apr-Jun 2007		Jan-Mar 2007
OPERATIONS
Net income		133		373		267		220		254
Adjustments to reconcile net income to cash		31		17		32		30		28
		164		390		299		250		282
Changes in operating net assets		-101		44		88		16		-454
Cash flow from operating activities		64		434		387		266		-172
INVESTMENTS
Investing activities		-22		-27		-53		-31		-53
Cash flow from investing activities		-22		-27		-53		-31		-53
FINANCING
Financing activities		- 462		0		- 300		- 548		- 1
Cash flow from financing activities		-462		0		-300		-548		-1
Net change in cash		-421		408		34		-312		-226
Cash, beginning of period		2,155		1,758		1,730		2,045		2,273
Translation difference in Cash		-24		-10		-6		-3		-2
Cash, end of period		1,711		2,155		1,758		1,730		2,045

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Sony Ericsson

NET SALES BY MARKET AREA BY QUARTER

 

EUR million
		2008			2007
Isolated quarters		Q1			Q4			Q3			Q2			Q1
Europe, Middle East & Africa *		1,494			2,251			1,715			1,729			1,598
Americas		486			636			573			499			365
Asia		722			884			820			885			961
Total		2,702			3,771			3,108			3,112			2,925
* of which Western Europe		979			1,569			1,103			1,102			1,078
		2008			2007
Sequential change (%)		Q1			Q4			Q3			Q2			Q1
Europe, Middle East & Africa *		-34	%		31	%		-1	%		8	%		-26	%
Americas		-24	%		11	%		15	%		37	%		-34	%
Asia		-18	%		8	%		-7	%		-8	%		-11	%
Total		-28	%		21	%		0	%		6	%		-23	%
* of which Western Europe		-38	%		42	%		0	%		2	%		-27	%
		2008			2007
Year over year change (%)		Q1			Q4			Q3			Q2			Q1
Europe, Middle East & Africa *		-7	%		5	%		7	%		59	%		55	%
Americas		33	%		15	%		37	%		52	%		46	%
Asia		-25	%		-18	%		-8	%		4	%		35	%
Total		-8	%		0	%		7	%		37	%		47	%
* of which Western Europe		-9	%		6	%		-1	%		47	%		60	%
		2008			2007
Year to date		0803			0712			0709			0706			0703
Europe, Middle East & Africa *		1,494			7,293			5,042			3,328			1,598
Americas		486			2,072			1,436			864			365
Asia		722			3,550			2,666			1,846			961
Total		2,702			12,916			9,145			6,037			2,925
* of which Western Europe		979			4,852			3,283			2,179			1,078
		2008			2007
YTD year over year change (%)		0803			0712			0709			0706			0703
Europe, Middle East & Africa *		-7	%		24	%		36	%		57	%		55	%
Americas		33	%		34	%		44	%		49	%		46	%
Asia		-25	%		0	%		8	%		18	%		35	%
Total		-8	%		18	%		27	%		42	%		47	%
* of which Western Europe		-9	%		21	%		29	%		53	%		60	%

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Date: April 23, 2008