Boasting a 65 percent increase in first quarter earnings, Ericsson Inc. reported its radio communications sector is largely accountable for the company’s financial results.
For the period ended March 31, Ericsson’s net income totaled $114 million, compared with $69 million for the same period in 1994. Net revenue also soared, reaching $2.7 billion, up 23.9 percent from $2.2 billion last year, reported the Stockholm, Sweden-based company. Radio communications, dominated by mobile telephony, is responsible for $1.4 billion of those revenues, increasing 41.3 percent from $977.8 million in 1994.
The United States remains Ericsson’s largest single market, claiming slightly more than 10 percent of net sales. Combined, Ericsson’s European interests account for about 52 percent of net sales, most heavily concentrated in Sweden. Sales in Asia collectively represent 22 percent of total sales, derived primarily from China.
Radio communications accounts for nearly 52 percent of Ericsson’s net sales, derived largely from wireless phone sales, the company said, noting mobile phone systems sales remain strong. Combined net sales of wireless phones and systems increased by more than 50 percent in the first quarter, Ericsson noted. The United States, China, Australia, Great Britain and Germany are Ericsson’s strongest wireless telephony markets.
“Despite the explosive growth that has occurred, we have always been able to maintain a world market share of slightly more than 40 percent, measured in terms of the number of subscribers connected to delivered systems,” stated Lars Ramqvist, Ericsson’s chief executive officer. “We are the only company that supplies systems based on all established standards, analog as well as digital, and this has provided us a broad and stable customer base for repeat business.”
In the first three months of 1995, Ericsson began restructuring its public telecommunications sector to focus on developing its narrowband and broadband platforms. The division delivered $829.4 million in sales, a 14.8 percent increase from $722.3 million in the comparable period last year.
Looking forward, Ramqvist noted 1995 poses major challenges in the United States, referring to continued expansion of cellular telephony and the onset of broadband personal communications services. But remaining confident, Ramqvist proclaimed, “We received the first significant PCS order during the first quarter for systems based on the technology which we recommend, which clearly strengthens our possibilities for continued successes.” American Personal Communications will deploy its Washington, D.C.-area PCS network using Ericsson’s equipment, based on Global Systems for Mobile communications technology.
