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 25, 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 25, 2008 regarding “Ericsson reports first quarter 2008 results.”

 

 

 

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		First quarter report 2008 April 25, 2008

[Ericsson discloses the information provided herein pursuant to the Securities Markets Act and/or the Financial Instruments Trading Act. The information was submitted for publication at 07.30 CET, on April 25, 2008.]

Ericsson reports first quarter 2008 results

 

•

Sales SEK 44.2 (42.2) b., organic growth in constant currencies 9%

 

•

Operating income SEK 4.3 (8.2) b., excl. restructuring charges of SEK 0.8 b.

 

•

Operating margin 9.7% (19.3%), excl. restructuring charges of SEK 0.8 b.

 

•

Cash flow SEK 4.7 (4.6) b., cash conversion 83% (80%)

 

•

Net income SEK 2.6 (5.8) b.3), incl. restructuring charges of SEK 0.8 b.

 

•

Earnings per share SEK 0.17 (0.37) 3)

CEO COMMENTS

“Our business developed well in the quarter, considering the present market environment and the declining USD,” said Carl-Henric Svanberg, President and CEO of Ericsson (NASDAQ:ERIC). “We still find it prudent to plan for a flattish mobile infrastructure market in 2008. The ongoing cost reductions as we adjust to such a scenario are running according to plan.

The sales development in the quarter reflects the demand for mobile infrastructure, especially in high-growth markets. Sales are picking up in the US while Western Europe remains slow. The proportion of new network builds in high-growth markets, especially in India, is increasing. In combination with a weaker USD, this continues to put pressure on our margins.

Professional Services continue to show good growth with increasing demands in all areas, especially in managed services and systems integration. In Multimedia, we continue to invest in R&D in new business opportunities which reduce profitability. Multimedia’s result was also affected by Sony Ericsson’s lower sales which impacted sales of mobile platforms.

The rollout of mobile broadband continues throughout the world. HSPA will be the dominant standard for many years and is now an effective alternative to fixed broadband. Mobile broadband will play a significant role in bridging the digital divide. Furthermore, it is encouraging that LTE, the evolution of HSPA, is supported by the largest operators around the world. We are investing significantly in this technology to secure leadership also in this area,” said Carl-Henric Svanberg.

FINANCIAL HIGHLIGHTS

Income statement and cash flow

 

		First quarter									Fourth quarter
SEK b.		2008			2007			Change			2007			Change
Net sales		44.2			42.2			5	%		54.5			-19	%
Gross margin		38.6	%1)		43.0	%		—			36.1	%		—
EBITDA margin		14.7	%1)		23.8	%		—			18.4	%		—
Operating income		4.3	1)		8.2			-47	%		7.6			-44	%
Operating margin		9.7	%1)		19.3	%		—			14.0	%		—
Operating margin excl. Sony Ericsson		7.7	%1)		15.5	%		—			9.8	%		—
Income after financial items		4.5	1)		8.3			-46	%		7.6			-41	%
Net income 3)		2.6	2)		5.8			-55	%		5.6			-53	%
EPS, SEK 3)		0.17	2)		0.37			-54	%		0.35			-51	%
Cash flow from operating activities		4.7			4.6			3	%		12.0			-61	%
Cash flow excl. Sony Ericsson		2.5			1.1			—			12.0			—

1)

Excluding restructuring charges of SEK 0.8 b., of which SEK 0.2 b. in cost of sales and SEK 0.6 b. in operating expenses in 2008.

 

2)

Including restructuring charges of SEK 0.8 b.

 

3)

Attributable to stockholders of the Parent Company, excluding minority interest.

The year-over-year sales increased by 5%. Growth was negatively affected by a continued weakened USD. Organic growth in constant currencies is estimated to 9% and acquisitions added 2%.

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Gross margin amounted to 38.6% (43.0%) and declined year-over-year, mainly due to the business mix with a high proportion of new network buildouts. Sales of software and IPRs were slightly higher in the quarter.

Operating income amounted to SEK 4.3 (8.2) b. in the quarter. Operating expenses amounted to SEK 14.1 (11.8) b. in the quarter due to the impact of the acquired companies, including amortization of intangibles, and increased R&D investments, mainly in LTE, mobile platforms and IPTV. Sony Ericsson’s pre-tax profit contributed SEK 0.9 (1.6) b. to Group operating income in the quarter.

Cash flow from operating activities reached SEK 4.7 (4.6) b. in the quarter. The cash flow includes a dividend from Sony Ericsson of SEK 2.2 b. In the first quarter 2007, Sony Ericsson made an advance payment equivalent to a dividend of SEK 3.5 b. The working capital was slightly up. Cash conversion for the quarter amounted to 83% (80%). Days sales outstanding have increased by eight days in the quarter.

Cash flow from investing activities was SEK 3.2 (-9.2) b. First quarter 2007 was impacted by acquisitions.

Balance sheet and other performance indicators

 

		Three months		Full year
SEK b.		2008		2007
Net cash		28.3		24.3
Interest-bearing liabilities and post employment benefits		32.0		33.4
Trade receivables		56.4		60.5
Days sales outstanding		110		102
Inventory		24.5		22.5
Of which work in progress		13.8		12.5
Inventory turnover		4.61)		5.2
Payable days		57		57
Customer financing, net		2.7		3.4
Return on capital employed		12%1)		21%
Equity ratio		56%		55%

1)

Excluding effects from restructuring.

During the quarter, approximately SEK 0.8 b. of provisions was utilized for costs related to product warranties, customer projects, restructuring and other. Additions of SEK 2.0 b., including restructuring charges of SEK 0.7 b., and reversals of SEK 0.6 b. have been made as a result of risk assessments in the ongoing business.

At the end of the period, equity amounted to SEK 134.6 b., an increase by SEK 7.3 b. compared to same period last year.

Cost reductions

As announced in the fourth quarter report 2007, cost reductions of SEK 4 b. in annual savings will be made. These reductions will have full effect in 2009. Restructuring charges are estimated to SEK 4 b. and will be recognized as each activity is decided.

During the first quarter, restructuring costs of SEK 0.8 b., of which SEK 0.2 b. in cost of sales and SEK 0.6 b. in operating expenses, have been taken, primarily for reductions in Western Europe. Charges for the restructuring program in Sweden that was announced in April will be effected in the second quarter 2008.

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SEGMENT RESULTS

 

		First quarter									Fourth quarter
SEK b.		2008			2007			Change			2007			Change
Networks sales		30.0			29.3			2	%		37.5			-20	%
Of which network rollout		4.5			3.8			20	%		6.4			-30	%
Operating margin		9	%1)		17	%		—			10	%		—
EBITDA margin		15	%1)		23	%		—			15	%		—
Professional Services sales		10.3			9.5			8	%		12.1			-15	%
Of which managed services		3.1			2.6			20	%		3.3			-6	%
Operating margin		13	%1)		15	%		—			15	%		—
EBITDA margin		15	%1)		16	%		—			16	%		—
Multimedia sales		3.9			3.4			16	%		4.9			-20	%
Operating margin		-13	%1)		8	%		—			-9	%		—
EBITDA margin		-6	%1)		9	%		—			-3	%		—
Total sales		44.2			42.2			5	%		54.5			-19	%

1)

Excluding effects from restructuring.

Networks

Sales in Networks grew by 2% year-over-year despite a negative impact from the USD decline. The sales increase was driven by increased sales of GSM in high-growth markets, especially in China and India. This is reflected in the strong growth in Network rollout services which is a lower margin business. Sales of software and IPRs were slightly higher in the quarter. The EBITDA margin was 15%, flat sequentially.

The demand for GSM remains healthy and the business activity is increasing, particularly in India and China. 3G rollouts are ongoing throughout the world, including major rollouts in Russia and Latin America. The largest proportion of R&D investments in Networks is spent on WCDMA and an increasing part on LTE. Several major operators have announced plans to upgrade their networks to 14.4 Mbps and Ericsson will introduce 21 Mbps during the second half of the year.

Redback has significantly increased its sales outside the US through leveraging Ericsson’s global sales organization. Since the acquisition, Ericsson has signed agreements for the delivery of Redback-based solutions with more than 100 carriers in over 65 countries.

Professional Services

Sales in Professional Services grew by 8% year-over-year with a growth in constant currencies of 10%. As expected, managed services sales decreased sequentially with the reduced scope of the 3 UK contract announced in the fourth quarter 2007 but increased 20% year-over-year. Operating margin in Professional Services declined to 13% (15%) due to the high proportion of new managed services contracts in a start-up phase. With increased network complexity, system integration is a growth area but sales will vary with customer projects.

Multimedia

Sales growth amounted to 16% year-over-year, largely driven by acquisitions. The business activity has been high in the quarter with important reference contracts in IPTV as well as increased traction in Tandberg Television.

Within segment Multimedia, revenue management, service delivery platforms, Tandberg Television and mobile platforms account for the vast majority of sales and generate good growth and margins. The strategy is to leverage these leading positions and invest in new areas for future growth, such as IPTV, IMS and enterprise applications. In these areas, sales are still low and R&D investments are significant.

Sales and operating income for mobile platforms were negatively affected by approximately SEK 0.3 b. in the quarter following Sony Ericsson’s lower sales in the first quarter.

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Sony Ericsson Mobile Communications

For information on transactions with Sony Ericsson Mobile Communications, please see Financial statements and Additional information.

 

		First quarter									Fourth quarter
EUR m.		2008			2007			Change			2007			Change
Number of units shipped (m.)		22.3			21.8			2	%		30.8			-27	%
Average selling price (EUR)		121			134			-10	%		123			-2	%
Net sales		2,702			2,925			-8	%		3,771			-28	%
Gross margin		29	%		30	%		—			32	%		—
Operating margin		7	%		12	%		—			13	%		—
Income before taxes		193			362			-47	%		501			-61	%
Net income		133			254			-48	%		373			-64	%

Units shipped in the quarter reached 22.3 million, a 2% increase compared to the same period last year. Sales declined by 8% year-over-year due to a slowing market growth in the mid-to-high end phones in markets where Sony Ericsson has a strong presence. Gross margin was one percentage point lower than first quarter 2007, reflecting a less favorable product mix.

Ericsson’s share in Sony Ericsson’s income before tax was SEK 0.9 (1.6) b. in the quarter. During the quarter, Ericsson received a dividend from Sony Ericsson of SEK 2.2 b. A second dividend payment is planned for this year.

REGIONAL OVERVIEW

 

		First quarter							Fourth quarter
Sales, SEK b.		2008		2007		Change			2007		Change
Western Europe		11.7		12.5		-7	%		15.4		-24	%
Central and Eastern Europe, Middle
East and Africa		11.1		11.0		1	%		14.3		-22	%
Asia Pacific		12.9		12.3		5	%		13.7		-6	%
Latin America		4.2		3.3		25	%		6.8		-38	%
North America		4.3		3.1		39	%		4.3		0	%

Western Europe sales declined by 7% year-over-year. The trend of operator consolidation continues. Germany showed good growth, driven by managed services. UK was affected by an overall slow market. The adjusted scope of the managed services contract with 3 UK affects sales but not margins. Spain also showed slower sales in the quarter compared to a strong first quarter 2007.

The overall business activity is high in Central and Eastern Europe, Middle East and Africa although sales were flat year-over-year. During the quarter, Africa and parts of the Middle East showed strong performance. In Russia 3G rollouts are underway.

Asia Pacific sales were up 5% year-over-year. India was up significantly, offsetting a slower investment level in Bangladesh due to political uncertainty. China showed good growth while Japan and Australia were down due to tough year-over-year comparisons.

Latin America sales were up 25% year-over-year. Continued 2G expansions as well as new 3G rollouts in Brazil and Mexico contributed to the strong development.

North America sales grew by 39% year-over-year, due to investments in WCDMA/HSPA. A higher level of IPR-related sales also contributed to the sales growth. The spectrum auction has been concluded and the successful bidders are planning for mobile broadband rollouts over the coming years.

MARKET DEVELOPMENT

Growth rates based on Ericsson and market estimates.

The industry consolidation among operators and our competitors continues and the competition is still intense, especially from Chinese vendors.

Mobile broadband rollouts continue and are expanding to new markets throughout the world. The strong data traffic growth confirms consumer interest in the new multimedia services that are made available.

---

The concluded 700 MHz auction in the US, the upcoming Chinese telecom reform as well as other license auctions around the world should pave the way for deployments of new networks. The tariff competition continues to be strong in many markets, driving traffic growth further.

HSPA will be the dominant mobile broadband standard for many years. Furthermore, the support from the world’s largest operators underpins LTE’s status as the next global standard.

Mobile subscriptions grew with some 160 million in the quarter to a total of 3.48 billion. 205 million are WCDMA subscriptions, up by 22 million in the first quarter. There are 211 WCDMA networks in 91 countries, of which 185 networks are upgraded to HSPA.

In the twelve-month period ending December 31, 2007, fixed broadband connections grew by 20% to some 335 million.

PLANNING ASSUMPTIONS

Unchanged industry fundamentals and consumer behavior support a positive longer-term outlook. For 2008, we continue to plan for a flattish development in the mobile infrastructure market while the professional services market is expected to show good growth.

PARENT COMPANY INFORMATION

Net sales for the first quarter amounted to SEK 2.0 (0.7) b. and income after financial items was SEK 4.4 (4.0) b.

Major changes in the Parent Company’s financial position for the first quarter include decreased current and non-current receivables from subsidiaries of SEK 5.8 b. and increased cash and bank and short-term investments of SEK 5.5 b. Current and non-current liabilities to subsidiaries decreased by SEK 2.5 b. At the end of the quarter, cash and bank and short-term investments amounted to SEK 51.1 (45.6) b.

Major transactions with related parties include the following transactions and balances with Sony Ericsson Mobile Communications: revenues of SEK 0.6 (0.5) b.; receivables of SEK 0.7 (0.9) b.; dividend of SEK 2.2 (2.6) b.

In accordance with the conditions of the Stock Purchase Plans and Option Plans for Ericsson employees, 7,291,951 shares from treasury stock were sold or distributed to employees during the first quarter. The holding of treasury stock at March 31, 2008, was 224,699,592 shares of class B.

OTHER INFORMATION

Annual General Meeting

The Annual General Meeting (AGM) decided, as previously announced and in accordance with the proposal from the Board of Directors, on a dividend payment of SEK 0.50 per share for 2007 and with April 14, 2008, as the date of record for dividend. The total dividend payment amounts to SEK 8.0 b.

In accordance with the proposal from the Board of Directors, the AGM resolved on a reversed split of shares 1:5, to the effect that five shares of class A and five shares of class B, respectively, are consolidated into one share of class A and one share of class B respectively. The record date for the reversed split is June 4, 2008.

In accordance with the Board of Directors’ proposals, the AGM resolved the completion of LTV 2007 (Long Term Variable compensation). The AGM also resolved the implementation of LTV 2008, including directed issue of shares, directed acquisition offer and transfer of shares. In addition, the AGM resolved the transfer of treasury stock for previously decided LTV programs. For more details, see www.ericsson.com/investors.

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Divestiture of enterprise PBX solutions

On February 18, 2008, Ericsson entered into an agreement to divest its enterprise PBX solutions business, part of segment Multimedia, to Aastra Technologies. The agreement includes transfer of approximately 630 employees. The transaction is expected to close in April 2008.

Delisting from London Stock Exchange

As of April 15, 2008, Ericsson has delisted its class B shares from the London Stock Exchange.

Assessment of risk environment

Ericsson’s operational and financial risk factors and exposures are described under “Risk factors” in our Annual Report 2007 and we have determined that the risk environment has not materially changed. However, the increased activities related to the new Multimedia segment may result in a more volatile quarterly sales pattern. Specific additional risks for the near term are associated with the acquisitions made during 2007, as a timely and effective integration of these is essential to make them accretive as planned.

Risk factors and exposures in focus for the Parent Company and the Ericsson Group for the forthcoming six-month period include: unfavorable product mix in the Networks segment with reduced sales of software, upgrades and extensions and an increased proportion of new network build-outs and break-in contracts, which may result in lower gross margins and/or working capital build-up, which in turn puts pressure on our cash conversion rate; variability in the seasonality could make it more difficult to forecast future sales; effects of the ongoing industry consolidation among the Company’s customers as well as between our largest competitors, e.g. intensified price competition; changes in foreign exchange rates, in particular a continued weakness or further deterioration of the USD/SEK rate; increases in interest rates and the potential effect on operators’ willingness to invest in network development; and continued political unrest or instability in certain markets.

Ericsson conducts business in certain countries which are subject to trade restrictions or which are focused on by certain investors. We stringently follow all relevant regulations and trade embargos applicable to us in our dealings with customers operating in such countries. Moreover, Ericsson operates globally in accordance with Group level policies and directives for ethics and conduct. In no way should our business activities in these countries be construed as supporting a particular political agenda or regime. We have activities in such countries mainly due to that certain customers with multi-country operations put demands on us to support them in all of their markets.

Please refer further to Ericsson’s Annual Report 2007, where we describe our risks and uncertainties along with our strategies and tactics to mitigate the risk exposures or limit unfavorable outcomes.

Stockholm, April 25, 2008

Carl-Henric Svanberg

President and CEO

Telefonaktiebolaget LM Ericsson (publ)

Date for next report: July 22, 2008

REVIEW REPORT

We have reviewed this report for the period January 1 to March 31, 2008, for Telefonaktiebolaget LM Ericsson (publ). The board of directors and the CEO are responsible for the preparation and presentation of this interim financial information in accordance with IAS 34 and the Annual Accounts Act. Our responsibility is to express a conclusion on this interim financial information based on our review.

We conducted our review in accordance with the Standard on Review Engagements SÖG 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity, issued by FAR. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Standards on Auditing in Sweden, RS, and other generally accepted auditing practices. The procedures performed in a review do not enable us to obtain a level of assurance that would make us aware of all significant matters that might be identified in an audit. Therefore, the conclusion expressed based on a review does not give the same level of assurance as a conclusion expressed based on an audit.

Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim financial information is not, in all material respects, in accordance with IAS 34 and the Annual Accounts Act.

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Stockholm, April 25, 2008

PricewaterhouseCoopers AB

 

Bo Hjalmarsson		Peter Clemedtson
Authorized Public Accountant		Authorized Public Accountant
Lead partner

EDITOR’S NOTE

To read the complete report with tables, please go to:

www.ericsson.com/investors/financial_reports/2008/3month08-en.pdf

Ericsson invites media, investors and analysts to a press conference at the Ericsson headquarters, Torshamnsgatan 23, Stockholm, at 09.00 (CET), April 25.

An analysts, investors and media conference call will begin at 15.00 (CET).

Live webcasts of the press conference and conference call as well as supporting slides will be available at www.ericsson.com/press and www.ericsson.com/investors.

FOR FURTHER INFORMATION, PLEASE CONTACT

Henry Sténson, Senior Vice President,

Communications

Phone: +46 8 719 4044

E-mail: investor.relations@ericsson.com or

press.relations@ericsson.com

Investors

Gary Pinkham, Vice President,

Investor Relations

Phone: +46 8 719 0000

E-mail: investor.relations@ericsson.com

Susanne Andersson,

Investor Relations

Phone: +46 8 719 4631

E-mail: investor.relations@ericsson.com

Andreas Hedemyr,

Investor Relations

Phone: +46 8 404 37 48

E-mail: investor.relations@ericsson.com

Media

Åse Lindskog, Vice President,

Head of Media Relations

Phone: +46 8 719 9725, +46 730 244 872

E-mail: press.relations@ericsson.com

Ola Rembe, Vice President,

Phone: +46 8 719 9727, +46 730 244 873

E-mail: press.relations@ericsson.com

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Telefonaktiebolaget LM Ericsson (publ)

Org. number: 556016-0680

Torshamnsgatan 23

SE-164 83 Stockholm

Phone: +46 8 719 00 00

www.ericsson.com

Safe Harbor Statement of Ericsson under the Private Securities Litigation Reform Act of 1995;

All statements made or incorporated by reference in this release, other than statements or characterizations of historical facts, are forward-looking statements. These forward-looking statements are based on our current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by us. Forward-looking statements can often be identified by words such as “anticipates”, “expects”, “intends”, “plans”, “predicts”, “believes”, “seeks”, “estimates”, “may”, “will”, “should”, “would”, “potential”, “continue”, and variations or negatives of these words, and include, among others, statements regarding: (i) strategies, outlook and growth prospects; (ii) positioning to deliver future plans and to realize potential for future growth; (iii) liquidity and capital resources and expenditure, and our credit ratings; (iv) growth in demand for our products and services; (v) our joint venture activities; (vi) economic outlook and industry trends; (vii) developments of our markets; (viii) the impact of regulatory initiatives; (ix) research and development expenditures; (x) the strength of our competitors; (xi) future cost savings; (xii) plans to launch new products and services; (xiii) assessments of risks; (xiv) integration of acquired businesses; (xv) compliance with rules and regulations and (xvi) infringements of intellectual property rights of others.

In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. These forward-looking statements speak only as of the date hereof and are based upon the information available to us at this time. Such information is subject to change, and we will not necessarily inform you of such changes. These statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions that are difficult to predict. Therefore, our actual results could differ materially and adversely from those expressed in any forward-looking statements as a result of various factors. Important factors that may cause such a difference for Ericsson include, but are not limited to: (i) material adverse changes in the markets in which we operate or in global economic conditions; (ii) increased product and price competition; (iii) further reductions in capital expenditure by network operators; (iv) the cost of technological innovation and increased expenditure to improve quality of service; (v) significant changes in market share for our principal products and services; (vi) foreign exchange rate or interest rate fluctuations; and (vii) the successful implementation of our business and operational initiatives.

FINANCIAL STATEMENTS AND ADDITIONAL INFORMATION

 

		Page
Financial statements
Consolidated income statement		9
Consolidated balance sheet		10
Consolidated statement of cash flows		11
Consolidated statement of recognized income and expense		12
Consolidated income statement—isolated quarters		13
Consolidated statement of cash flows—isolated quarters		14
Parent Company income statement		15
Parent Company balance sheet		15
		Page
Additional information
Accounting policies		16
Net sales by segment by quarter		17
Operating income and margin by segment by quarter		18
Number of employees		18
EBITDA income and margin by segment by quarter		19
Net sales by market area by quarter		20
Top 15 markets in sales		21
External net sales by market area by segment		21
Transactions with Sony Ericsson Mobile Communications		21
Provisions		21
Other information		22
Ericsson planning assumptions for year 2008		22

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Ericsson

CONSOLIDATED INCOME STATEMENT

 

		Jan-Mar									Jan-Dec
SEK million		2008			2007			Change			2007
Net sales		44,175			42,156			5	%		187,780
Cost of sales		-27,356			-24,034						-114,059
Gross income		16,819			18,122			-7	%		73,721
Gross margin %		38.1	%		43.0	%					39.3	%
Research and development expenses		-8,566			-6,453			33	%		-28,842
Selling and administrative expenses		-6,106			-5,322			15	%		-23,199
Operating expenses		-14,672			-11,775						-52,041
Other operating income and expenses		439			162			171	%		1,734
Share in earnings of JVs and associated companies		911			1,642			-45	%		7,232
Operating income		3,497			8,151			-57	%		30,646
Operating margin %		7.9	%		19.3	%					16.3	%
Financial income		665			556						1,778
Financial expenses		-473			-443						-1,695
Income after financial items		3,689			8,264			-55	%		30,729
Taxes		-1,070			-2,415						-8,594
Net income		2,619			5,849			-55	%		22,135
Net income attributable to:
Stockholders of the Parent Company		2,645			5,815						21,836
Minority interest		-26			34						299
Other information
Average number of shares, basic (million)		15,905			15,883						15,891
Earnings per share, basic (SEK) 1)		0.17			0.37						1.37
Earnings per share, diluted (SEK) 1)		0.17			0.36						1.37

 

1)	Based on Net income attributable to stockholders of the Parent Company

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Ericsson

CONSOLIDATED BALANCE SHEET

 

SEK million		Mar 31 2008		Dec 31 2007
ASSETS
Non-current assets
Intangible assets
Capitalized development expenses		3,305		3,661
Goodwill		21,165		22,826
Intellectual property rights, brands and other intangible assets		22,443		23,958
Property, plant and equipment		9,119		9,304
Financial assets
Equity in JVs and associated companies		9,119		10,903
Other investments in shares and participations		728		738
Customer financing, non-current		734		1,012
Other financial assets, non-current		2,588		2,918
Deferred tax assets		11,593		11,690
		80,794		87,010
Current assets
Inventories		24,508		22,475
Trade receivables		56,436		60,492
Customer financing, current		1,947		2,362
Other current receivables		16,223		15,062
Short-term investments		24,891		29,406
Cash and cash equivalents		35,417		28,310
		159,422		158,107
Total assets		240,216		245,117
EQUITY AND LIABILITIES
Equity
Stockholders’ equity		133,693		134,112
Minority interest in equity of subsidiaries		866		940
		134,559		135,052
Non-current liabilities
Post-employment benefits		6,719		6,188
Provisions, non-current		373		368
Deferred tax liabilities		2,468		2,799
Borrowings, non-current		21,099		21,320
Other non-current liabilities		1,603		1,714
		32,262		32,389
Current liabilities
Provisions, current		9,683		9,358
Borrowings, current		4,211		5,896
Trade payables		16,571		17,427
Other current liabilities		42,930		44,995
		73,395		77,676
Total equity and liabilities		240,216		245,117
Of which interest-bearing liabilities and post-employment benefits		32,029		33,404
Net cash		28,279		24,312
Assets pledged as collateral		411		1,999
Contingent liabilities		1,144		1,182

---

Ericsson

CONSOLIDATED STATEMENT OF CASH FLOWS

 

		Jan-Mar				Jan-Dec
SEK million		2008		2007		2007
Operating activities
Net income		2,619		5,849		22,135
Adjustments to reconcile net income to cash
- taxes		-311		-289		1,119
- earnings/dividends in JVs and associated companies		1,736		-1,504		-1,413
- depreciation, amortization and impairment losses		2,214		1,863		8,363
- other		-589		-164		-897
		5,669		5,755		29,307
Changes in operating net assets
Inventories		-2,912		-1,787		-445
Customer financing, current and non-current		660		-120		365
Trade receivables		2,282		200		-7,467
Provisions and post-employment benefits		571		-2,059		-4,401
Other operating assets and liabilities, net		-1,540		2,587		1,851
		- 939		-1,179		-10,097
Cash flow from operating activities		4,730		4,576		19,210
Investing activities
Investments in property, plant and equipment		- 946		-768		-4,319
Sales of property, plant and equipment		209		39		152
Acquisitions/divestments of subsidiaries and other operations, net		7		-15,696		-26,208
Product development		- 333		-206		-1,053
Other investing activities		204		-74		396
Short-term investments		4,059		7,523		3,499
Cash flow from investing activities		3,200		-9,182		-27,533
Cash flow before financing activities		7,930		-4,606		-8,323
Financing activities
Dividends paid		-6		—		-8,132
Other financing activities		-1,026		572		14,390
Cash flow from financing activities		-1,032		572		6,258
Effect of exchange rate changes on cash		209		257		406
Net change in cash		7,107		-3,777		-1,659
Cash and cash equivalents, beginning of period		28,310		29,969		29,969
Cash and cash equivalents, end of period		35,417		26,192		28,310

 

---

CONSOLIDATED STATEMENT OF RECOGNIZED INCOME AND EXPENSE

 

		Jan-Mar		Jan-Mar		Jan-Dec
SEK million		2008		2007		2007
Income and expense recognized directly in equity
Actuarial gains and losses related to pensions		-802		-66		1,208
Revaluation of other investments in shares and participations
Fair value measurement reported in equity		-6		8		2
Cash flow hedges
Fair value remeasurement of derivatives reported in equity		1,161		-977		584
Transferred to income statement for the period		-228		-212		-1,390
Changes in cumulative translation adjustments		-3,256		1,330		-797
Tax on items reported directly in/or transferred from equity		-89		341		-73
Total transactions reported in equity		-3,220		424		-466
Net income		2,619		5,849		22,135
Total income and expense recognized for the period		-601		6,273		21,669
Attributable to:
Stockholders of the Parent Company		-533		6,208		21,371
Minority interest		-68		65		298
Other changes in equity:
Sale of own shares		15		15		62
Stock Purchase- and Stock Option Plans		99		139		509
Dividends paid
Stockholders of the Parent Company		—		—		-7,943
Minority interest		-6		—		-189
Business combinations
Minority interest		—		-18		49

---

Ericsson

CONSOLIDATED INCOME STATEMENT—ISOLATED QUARTERS

 

		2008			2007
SEK million		Q1			Q4			Q3			Q2			Q1
Net sales		44,175			54,460			43,545			47,619			42,156
Cost of sales		-27,356			-34,809			-28,050			-27,166			-24,034
Gross income		16,819			19,651			15,495			20,453			18,122
Gross margin %		38.1	%		36.1	%		35.6	%		43.0	%		43.0	%
Research and development expenses		-8,566			-7,952			-7,229			-7,208			-6,453
Selling and administrative expenses		-6,106			-7,238			-4,783			-5,856			-5,322
Operating expenses		-14,672			-15,190			-12,012			-13,064			-11,775
Other operating income and expenses		439			781			402			389			162
Share in earnings of JVs and associated companies		911			2,362			1,751			1,477			1,642
Operating income		3,497			7,604			5,636			9,255			8,151
Operating margin %		7.9	%		14.0	%		12.9	%		19.4	%		19.3	%
Financial income		665			510			389			322			556
Financial expenses		-473			-517			-442			-292			-443
Income after financial items		3,689			7,597			5,583			9,285			8,264
Taxes		-1,070			-1,774			-1,629			-2,776			-2,415
Net income		2,619			5,823			3,954			6,509			5,849
Net income attributable to:
Stockholders of the Parent Company		2,645			5,642			3,970			6,409			5,815
Minority interest		-26			181			-16			100			34
Other information
Average number of shares, basic (million)		15,905			15,896			15,894			15,890			15,883
Earnings per share, basic (SEK) 1)		0.17			0.35			0.25			0.40			0.37
Earnings per share, diluted (SEK) 1)		0.17			0.35			0.25			0.40			0.36

 

1)	Based on Net income attributable to stockholders of the Parent Company

---

Ericsson

CONSOLIDATED STATEMENT OF CASH FLOWS—ISOLATED QUARTERS

 

		2008		2007
SEK million		Q1		Q4		Q3		Q2		Q1
Operating activities
Net income		2,619		5,823		3,954		6,509		5,849
Adjustments to reconcile net income to cash
- taxes		-311		49		-65		1,424		-289
- undistributed earnings in JVs and associated companies		1,736		-2,033		209		1,915		-1,504
- depreciation, amortization and impairment losses		2,214		2,407		1,953		2,140		1,863
- other		-589		-829		63		33		-164
		5,669		5,417		6,114		12,021		5,755
Changes in operating net assets
Inventories		-2,912		3,401		-1,563		-496		-1,787
Customer financing, current and non-current		660		467		-76		94		-120
Trade receivables		2,282		-2,948		-2,443		-2,276		200
Provisions and post-employment benefits		571		-1,011		-824		-507		-2,059
Other operating assets and liabilities, net		-1,540		6,693		-2,813		-4,616		2,587
		-939		6,602		-7,719		-7,801		-1,179
Cash flow from operating activities		4,730		12,019		-1,605		4,220		4,576
Investing activities
Investments in property, plant and equipment		-946		-1,656		-871		-1,024		-768
Sales of property, plant and equipment		209		62		13		38		39
Acquisitions/divestments of subsidiaries and other operations, net		7		196		-2,444		-8,264		-15,696
Product development		-333		-359		-237		-251		-206
Other investing activities		204		604		-92		-42		-74
Short-term investments		4,059		-5,745		67		1,654		7,523
Cash flow from investing activities		3,200		-6,898		-3,564		-7,889		-9,182
Cash flow before financing activities		7,930		5,121		-5,169		-3,669		-4,606
Financing activities
Dividends paid		-6		-7		-177		-7,948		—
Other financing activities		-1,026		2,254		241		11,323		572
Cash flow from financing activities		-1,032		2,247		64		3,375		572
Effect of exchange rate changes on cash		209		315		171		-337		257
Net change in cash		7,107		7,683		-4,934		-631		-3,777
Cash and cash equivalents, beginning of period		28,310		20,627		25,561		26,192		29,969
Cash and cash equivalents, end of period		35,417		28,310		20,627		25,561		26,192

---

ERICSSON PARENT COMPANY INCOME STATEMENT

 

		Jan-Mar				Jan-Dec
SEK million		2008		2007		2007
Net sales		1,969		685		3,236
Cost of sales		-376		-3		-368
Gross income		1,593		682		2,868
Operating expenses		-513		-301		-1,351
Other operating income and expenses		629		470		2,723
Operating income		1,709		851		4,240
Financial net		2,713		3,194		10,485
Income after financial items		4,422		4,045		14,725
Transfers to untaxed reserves, net		—		—		-265
Taxes		-539		-406		-1,315
Net income		3,883		3,639		13,145

ERICSSON PARENT COMPANY BALANCE SHEET

 

SEK million		Mar 31 2008		Dec 31 2007
ASSETS
Fixed assets
Intangible assets		2,893		2,989
Tangible assets		509		443
Financial assets		106,536		106,478
		109,938		109,910
Current assets
Inventories		95		84
Receivables		23,835		28,873
Cash, bank and short-term investments		51,129		45,608
		75,059		74,565
Total assets		184,997		184,475
STOCKHOLDERS’ EQUITY, PROVISIONS AND LIABILITIES
Equity
Restricted equity		47,624		47,624
Non-restricted equity		39,129		35,225
		86,753		82,849
Untaxed reserves		1,339		1,339
Provisions		910		1,057
Non-current liabilities		47,322		50,457
Current liabilities		48,673		48,773
Total stockholders’ equity, provisions and liabilities		184,997		184,475
Assets pledged as collateral		410		359
Contingent liabilities		11,887		9,650

---

ACCOUNTING POLICIES

The Group

This interim report is prepared in accordance with IAS 34. The term “IFRS” used in this document refers to the application of IAS and IFRS as well as interpretations of these standards as issued by IASB’s Standards Interpretation Committee (SIC) and International Financial Reporting Interpretations Committee (IFRIC).

New interpretation (IFRIC), endorsed by the EU

IFRIC 11 IFRS 2 – Group and Treasury Share Transactions requires a share-based payment arrangement in which a company receives goods or services as consideration for its own equity instruments to be accounted for as an equity-settled share-based payment transaction, regardless of how the equity instruments are obtained. IFRIC 11 is mandatory for the Company’s 2008 financial statements, with retrospective application required. It has not had any impact on the consolidated financial statements since the Company is not buying equity instruments from other parties to satisfy its obligations to its employees.

Renaming of recommendations issued by the Swedish Financial Accounting Standards Council (Rådet för finansiell rapportering)

The Swedish Financial Accounting Standards Council issues recommendations in relation to matters that are unique for Sweden. These recommendations have from January 1, 2008, been given new names, for example RR 30:06 has been renamed to RFR 1.1. The content of the renamed recommendations has not been changed.

The Parent Company

Recommendations issued by the Swedish Financial Accounting Standards Council (Rådet för finansiell rapportering), related to the Parent Company have also been renamed. None of these changes have had an impact on the financial statements of the Parent Company.

---

NET SALES BY SEGMENT BY QUARTER

 

SEK million
		2008			2007
Isolated quarters		Q1			Q4			Q3			Q2			Q1
Networks		29,992			37,463			28,538			33,666			29,350
- Of which Network rollout		4,520			6,444			4,002			4,309			3,752
Professional Services		10,267			12,134			10,995			10,257			9,516
- Of which Managed services		3,112			3,318			3,352			2,910			2,592
Multimedia		3,916			4,868			4,017			3,650			3,370
Less: Intersegment sales		—			-5			-5			46			-80
Total		44,175			54,460			43,545			47,619			42,156
		2008			2007
Sequential change (%)		Q1			Q4			Q3			Q2			Q1
Networks		-20	%		31	%		-15	%		15	%		-25	%
- Of which Network rollout		-30	%		61	%		-7	%		15	%		-32	%
Professional Services		-15	%		10	%		7	%		8	%		-10	%
- Of which Managed services		-6	%		-1	%		15	%		12	%		3	%
Multimedia		-20	%		21	%		10	%		8	%		-26	%
Total		-19	%		25	%		-9	%		13	%		-22	%
		2008			2007
Year over year change (%)		Q1			Q4			Q3			Q2			Q1
Networks		2	%		-4	%		-2	%		7	%		5	%
- Of which Network rollout		20	%		16	%		14	%		26	%		-4	%
Professional Services		8	%		15	%		26	%		11	%		15	%
- Of which Managed services		20	%		32	%		50	%		21	%		11	%
Multimedia		16	%		7	%		31	%		6	%		19	%
Total		5	%		0	%		6	%		6	%		7	%
		2008			2007
Year to Date		0803			0712			0709			0706			0703
Networks		29,992			129,017			91,554			63,016			29,350
- Of which Network rollout		4,520			18,507			12,063			8,061			3,752
Professional Services		10,267			42,902			30,768			19,773			9,516
- Of which Managed services		3,112			12,172			8,854			5,502			2,592
Multimedia		3,916			15,905			11,037			7,020			3,370
Less: Intersegment sales		—			-44			-39			-34			-80
Total		44,175			187,780			133,320			89,775			42,156
		2008			2007
YTD year over year change (%)		0803			0712			0709			0706			0703
Networks		2	%		1	%		3	%		6	%		5	%
- Of which Network rollout		20	%		13	%		11	%		10	%		-4	%
Professional Services		8	%		16	%		17	%		13	%		15	%
- Of which Managed services		20	%		28	%		27	%		16	%		11	%
Multimedia		16	%		14	%		18	%		12	%		19	%
Total		5	%		4	%		6	%		6	%		7	%

---

OPERATING INCOME BY SEGMENT BY QUARTER

 

SEK million
		2008		2007
Isolated quarters		Q1		Q4		Q3		Q2		Q1
Networks		1,945		3,836		2,256		6,396		4,910
Professional Services		1,278		1,792		1,682		1,515		1,405
Multimedia		-513		-439		42		-11		273
Phones		895		2,286		1,737		1,464		1,621
Unallocated 1)		-108		129		-81		-109		-58
Total		3,497		7,604		5,636		9,255		8,151
		2008		2007
Year to Date		0803		0712		0709		0706		0703
Networks		1,945		17,398		13,562		11,306		4,910
Professional Services		1,278		6,394		4,602		2,920		1,405
Multimedia		-513		-135		304		262		273
Phones		895		7,108		4,822		3,085		1,621
Unallocated 1)		-108		-119		-248		-167		-58
Total		3,497		30,646		23,042		17,406		8,151

 

1)	“Unallocated” consists mainly of costs for corporate staffs, non-operational capital gains and losses.

OPERATING MARGIN BY SEGMENT BY QUARTER

 

		2008			2007
As percentage of net sales, isolated quarters		Q1			Q4			Q3			Q2			Q1
Networks		7	%		10	%		8	%		19	%		17	%
Professional Services		12	%		15	%		15	%		15	%		15	%
Multimedia		-13	%		-9	%		1	%		0	%		8	%
Total		8	%		14	%		13	%		19	%		19	%
		2008			2007
As percentage of net sales, Year to Date		0803			0712			0709			0706			0703
Networks		7	%		13	%		15	%		18	%		17	%
Professional Services		12	%		15	%		15	%		15	%		15	%
Multimedia		-13	%		-1	%		3	%		4	%		8	%
Total		8	%		16	%		17	%		19	%		19	%

 

Calculation

not applicable for segment Phones and Unallocated.

NUMBER OF EMPLOYEES

 

		2008		2007
Year to date		0803		0712		0709		0706		0703
Western Europe 1)		42,100		41,500		40,300		39,600		38,050
Central & Eastern Europe, Middle East & Africa		7,700		7,350		6,850		6,200		6,600
Asia Pacific		13,450		13,100		12,350		11,650		11,000
Latin America		6,250		6,550		6,000		5,050		4,600
North America		5,500		5,500		5,450		5,000		4,900
Total		75,000		74,000		70,950		67,500		65,150
1) Of which Sweden		20,200		19,800		19,450		19,300		18,900

---

EBITDA BY SEGMENT BY QUARTER

 

SEK million
		2008		2007
Isolated quarters		Q1		Q4		Q3		Q2		Q1
Networks		3,690		5,767		3,846		8,183		6,643
Professional Services		1,484		1,988		1,828		1,689		1,494
Multimedia		-250		-159		260		167		314
Phones		895		2,286		1,737		1,464		1,621
Unallocated 1)		-108		129		-81		-109		-58
Total		5,711		10,011		7,590		11,394		10,014
		2008		2007
Year to Date		0803		0712		0709		0706		0703
Networks		3,690		24,439		18,672		14,826		6,643
Professional Services		1,484		6,999		5,011		3,183		1,494
Multimedia		-250		582		741		481		314
Phones		895		7,108		4,822		3,085		1,621
Unallocated 1)		-108		-119		-248		-167		-58
Total		5,711		39,009		28,998		21,408		10,014

 

1)	“Unallocated” consists mainly of costs for corporate staffs, non-operational capital gains and losses.

EBITDA MARGIN BY SEGMENT BY QUARTER

 

		2008			2007
As percentage of net sales, isolated quarters		Q1			Q4			Q3			Q2			Q1
Networks		12	%		15	%		13	%		24	%		23	%
Professional Services		14	%		16	%		17	%		16	%		16	%
Multimedia		-6	%		-3	%		6	%		5	%		9	%
Total		13	%		18	%		17	%		24	%		24	%
		2008			2007
As percentage of net sales, Year to Date		0803			0712			0709			0706			0703
Networks		12	%		19	%		20	%		24	%		23	%
Professional Services		14	%		16	%		16	%		16	%		16	%
Multimedia		-6	%		4	%		7	%		7	%		9	%
Total		13	%		21	%		22	%		24	%		24	%

 

Calculation

not applicable for segment Phones and Unallocated.

---

NET SALES BY MARKET AREA BY QUARTER

 

SEK million
		2008			2007
Isolated quarters		Q1			Q4			Q3			Q2			Q1
Western Europe 1)		11,681			15,396			12,341			12,440			12,508
Central & Eastern Europe, Middle East & Africa		11,123			14,256			11,957			11,468			10,980
Asia Pacific		12,908			13,734			12,027			16,616			12,252
Latin America		4,154			6,750			4,240			4,083			3,310
North America		4,309			4,324			2,980			3,012			3,106
Total 2)		44,175			54,460			43,545			47,619			42,156
1) Of which Sweden		1,993			2,453			1,946			2,055			1,941
2) Of which EU		12,744			17,575			13,643			13,977			13,783
		2008			2007
Sequential change (%)		Q1			Q4			Q3			Q2			Q1
Western Europe 1)		-24	%		25	%		-1	%		-1	%		-27	%
Central & Eastern Europe, Middle East & Africa		-22	%		19	%		4	%		4	%		-23	%
Asia Pacific		-6	%		14	%		-28	%		36	%		-12	%
Latin America		-38	%		59	%		4	%		23	%		-31	%
North America		0	%		45	%		-1	%		-3	%		-22	%
Total 2)		-19	%		25	%		-9	%		13	%		-22	%
1) Of which Sweden		-19	%		26	%		-5	%		6	%		-15	%
2) Of which EU		-27	%		29	%		-2	%		1	%		-26	%
		2008			2007
Year over year change (%)		Q1			Q4			Q3			Q2			Q1
Western Europe 1)		-7	%		-10	%		6	%		-3	%		9	%
Central & Eastern Europe, Middle East & Africa		1	%		-1	%		10	%		-3	%		16	%
Asia Pacific		5	%		-2	%		3	%		32	%		26	%
Latin America		25	%		41	%		1	%		7	%		-9	%
North America		39	%		9	%		3	%		-19	%		-41	%
Total 2)		5	%		0	%		6	%		6	%		7	%
1) Of which Sweden		3	%		7	%		3	%		2	%		19	%
2) Of which EU		-8	%		-6	%		5	%		-6	%		11	%
		2008			2007
Year to date		0803			0712			0709			0706			0703
Western Europe 1)		11,681			52,685			37,289			24,948			12,508
Central & Eastern Europe, Middle East & Africa		11,123			48,661			34,405			22,448			10,980
Asia Pacific		12,908			54,629			40,895			28,868			12,252
Latin America		4,154			18,383			11,633			7,393			3,310
North America		4,309			13,422			9,098			6,118			3,106
Total 2)		44,175			187,780			133,320			89,775			42,156
1) Of which Sweden		1,993			8,395			5,942			3,996			1,941
2) Of which EU		12,744			58,978			41,403			27,760			13,783
		2008			2007
YTD year over year change (%)		0803			0712			0709			0706			0703
Western Europe 1)		-7	%		-1	%		4	%		2	%		9	%
Central & Eastern Europe, Middle East & Africa		1	%		5	%		7	%		6	%		16	%
Asia Pacific		5	%		14	%		21	%		29	%		26	%
Latin America		25	%		12	%		0	%		-1	%		-9	%
North America		39	%		-15	%		-24	%		-32	%		-41	%
Total 2)		5	%		4	%		6	%		6	%		7	%
1) Of which Sweden		3	%		8	%		8	%		10	%		19	%
2) Of which EU		-8	%		0	%		3	%		2	%		11	%

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TOP 15 MARKETS IN SALES

 

Market		YTD Share of total sales
CHINA		7%
INDIA		6%
UNITED STATES		6%
ITALY		5%
SPAIN		5%
SWEDEN		5%
INDONESIA		4%
CANADA		4%
JAPAN		3%
UNITED KINGDOM		3%
BRAZIL		3%
NIGERIA		3%
GERMANY		3%
AUSTRALIA		2%
PAKISTAN		2%

EXTERNAL NET SALES BY MARKET AREA BY SEGMENT

 

SEK million
Jan - Mar 2008		Networks			Professional Services			Multimedia			Total
Western Europe		5,663			4,525			1,493			11,681
Central & Eastern Europe, Middle East & Africa		8,062			1,948			1,113			11,123
Asia Pacific		10,180			1,986			742			12,908
Latin America		2,890			970			294			4,154
North America		3,197			838			274			4,309
Total		29,992			10,267			3,916			44,175
Share of Total		68	%		23	%		9	%		100	%

TRANSACTIONS WITH SONY ERICSSON MOBILE COMMUNICATIONS

 

		2008		2007
SEK million		Q1		Q4		Q3		Q2		Q1
Revenues from Sony Ericsson		1,547		1,930		1,242		1,411		1,160
Purchases from Sony Ericsson		170		39		11		232		51
Receivables from Sony Ericsson		1,097		932		132		178		116
Liabilities to Sony Ericsson		330		204		1,357		2,464		3,720
Dividends from Sony Ericsson		2,220		—		1,388		2,561		—

PROVISIONS

 

SEK million
		2008		2007
Isolated quarters		Q1		Q4		Q3		Q2		Q1
Opening balance		9,726		10,357		11,675		12,291		13,882
Additions		2,019		1,710		874		1,056		1,519
Utilization/Cash out		-781		-1,215		-1,341		-1,276		-2,476
Reversal of excess amounts		-622		-1,401		-668		-1,006		-675
Reclassification, translation difference and other		-286		275		-183		610		41
Closing balance		10,056		9,726		10,357		11,675		12,291
		2008		2007
Year to date		0803		0712		0709		0706		0703
Opening balance		9,726		13,882		13,882		13,882		13,882
Additions		2,019		5,159		3,449		2,575		1,519
Utilization/Cash out		-781		-6,308		-5,093		-3,752		-2,476
Reversal of excess amounts		-622		-3,750		-2,349		-1,681		-675
Reclassification, translation difference and other		-286		743		468		651		41
Closing balance		10,056		9,726		10,357		11,675		12,291

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ERICSSON

OTHER INFORMATION

 

		Jan-Mar						Jan-Dec
		2008			2007			2007
Number of shares and earnings per share
Number of shares, end of period (million)		16,132			16,132			16,132
Of which class A-shares (million)		1,309			1,309			1,309
Of which class B-shares (million)		14,823			14,823			14,823
Number of treasury shares, end of period (million)		225			247			232
Number of shares outstanding, basic, end of period (million)		15,908			15,886			15,900
Number of shares outstanding, diluted, end of period (million)		15,986			15,960			15,974
Average number of treasury shares (million)		228			250			242
Average number of shares outstanding, basic (million)		15,905			15,883			15,891
Average number of shares outstanding, diluted (million)1)		15,983			15,957			15,964
Earnings per share, basic (SEK)		0.17			0.37			1.37
Earnings per share, diluted (SEK)1)		0.17			0.36			1.37
Ratios
Equity ratio, percent		56.0	%		56.6	%		55.1	%
Capital turnover (times)		1.1			1.2			1.2
Trade receivable turnover (times)		3.0			3.3			3.4
Inventory turnover (times)		4.7			4.2			5.2
Return on equity, percent		7.9	%		18.9	%		17.2	%
Return on capital employed, percent		9.9	%		23.8	%		20.9	%
Days Sales Outstanding		110			107			102
Payable days		57			67			57
Payment readiness, end of period		67,992			56,380			64,678
Payment readiness, as percentage of sales		38.5	%		33.4	%		34.4	%
Exchange rates used in the consolidation
SEK / EUR - average rate		9.43			9.17			9.24
- closing rate		9.40			9.35			9.45
SEK / USD - average rate		6.23			6.97			6.74
- closing rate		5.95			7.02			6.43
SEK million
Other
Additions to property, plant and equipment		946			768			4,319
- Of which in Sweden		399			234			1,250
Additions to capitalized development expenses		333			206			1,053
Capitalization of development expenses, net		-356			-336			-1,334
Depreciation, amortization and impairment losses
Development expenses		689			542			2,387
Property, plant and equipment and other intangible assets		1,525			1,321			5,976
Total depreciation, amortization and impairment losses		2,214			1,863			8,363
Export sales from Sweden		26,055			22,484			102,486

 

1)	Potential ordinary shares are not considered when their conversion to ordinary shares would increase earnings per share

ERICSSON PLANNING ASSUMPTIONS FOR YEAR 2008

Research and development expenses

We estimate R&D expenses for the full year to be at about the same runrate level as in the second half of 2007. The estimate includes amortizations/write-downs of intangible assets related to major acquisitions previously made. However, currency effects may cause this to change.

Tax rate

We estimate the tax rate for the full year 2008 to be around 28%.

Capital expenditures

Excluding acquisitions, the capital expenditures in relation to sales are not expected to be significantly different in 2008, remaining at roughly two percent of sales.

Utilization of provisions

Expected utilization of provisions for year 2008 is stated in the Annual report, note C18.

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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 25, 2008