Ericsson (NASDAQ: ERIC) announced its financial results for the fourth quarter and full-year 2016, with both revenues and profits topping estimates.
In the report, for the fourth quarter, revenue dropped 11% year-over-year to 65.2 billion kronor, or $7.4 billion, which was above the analysts’ estimates of 59.2 billion kronor. Operating income, excluding restructuring charges, declined to 4.4 billion kronor, but also beat the estimates of 3.35 billion kronor. The drop in operating income was mainly due to lower IPR licensing revenues, according to the company.
For the full-year 2016, revenues dropped 10% because of the weaker demand for broadband.
Operating income also declined to 6.3 billion kronor, which was due to lower sales and a changed business mix in broadband. Cash flow from operating activities for 2016 reached 14 billion kronor. In the statement, the company also announced the new President and CEO, Börje Ekholm. The announcement was effective on January 16, 2017.
“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,” Börje Ekholm, the new President and CEO of the company, said in the statement. “Profitability declined YoY following lower IPR licensing revenues mainly due to last year’s agreement with Apple, Inc. (NASDAQ: AAPL) as well as increased restructuring charges.”