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 19, 2011

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 19. 2011 regarding “Sony Ericsson reports first quarter 2011 results”

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PRESS RELEASE		April 19, 2011

Sony Ericsson reports first quarter 2011 results

Highlights:

 

•

Shift to Android-based smartphone portfolio drives profitability

•

Smartphone share of total sales more than doubled year-on-year

•

Xperia™ arc, Xperia™ PLAY and Xperia™ neo began shipping towards the end of the quarter

•

Some supply chain disruption due to the Japan earthquake

The consolidated financial summary for Sony Ericsson Mobile Communications AB (Sony Ericsson) for the first quarter ended March 31, 2011 is as follows:

 

		Q1 2010				Q4 2010				Q1 2011
Number of units shipped (million)			10.5				11.2				8.1
Average selling price (Euro)			134				136				141
Sales (Euro m.)			1,405				1,528				1,145
Gross margin (%)			31%				30%				33%
Operating income (Euro m.)			20				39				19
Operating margin (%)			1%				3%				2%
Restructuring charges (Euro m.)			-3				-3				-
Operating income excl. restructuring charges (Euro m.)			23				43				19
Operating margin excl. restructuring charges (%)			2%				3%				2%
Income before taxes (IBT) (Euro m.)			18				35				15
IBT excl. restructuring charges (Euro m.)			21				39				15
Net income (Euro m.)			21				8				11

Bert Nordberg, President & CEO of Sony Ericsson commented, “Sony Ericsson’s profitability continues as we accelerate our shift towards an Android-based smartphone portfolio, with smartphones comprising over 60% of our total sales during the quarter. Towards the end of the quarter we introduced the highly anticipated Xperia^™ arc and Xperia^™ PLAY, which have been well received by both operators and consumers around the world. However, the Japan earthquake made it a challenging quarter operationally and we are experiencing some disruptions to our supply chain. We will continue to evaluate the situation.”

Units shipped during the quarter were 8.1 million, a 23% decrease year-on-year and a 28% decrease sequentially, due to a decline in the number of feature phones shipped, introduction of new products towards the end of the quarter and seasonality.

Average selling price (ASP) for the quarter was Euro 141, a 5% increase year-on-year and a 4% increase sequentially, as a result of product and geographical mix more than offsetting price erosion.

Sales for the quarter were Euro 1,145 million, a 19% decrease year-on-year and 25% decrease sequentially.

The gross margin for the quarter was 33%, an increase of 2 percentage points year-on-year and

 

Sony Ericsson Mobile Communications Management Limited		Sony Ericsson House 202 Hammersmith Road London W6 7DN, United Kingdom		T: +44(0)20 8762 5800 www.sonyericsson.com

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an increase of 3 percentage points sequentially, which includes the impact from higher ASP and benefit of some larger than normal items relating to royalty matters and warranty estimates.

Income before taxes for the quarter was a profit of Euro 15 million, a decrease of Euro 3 million year-on-year and a decrease of Euro 20 million sequentially, with the impact of lower sales offset by higher gross margin percentage and lower operating expenses.

Net income for the quarter was Euro 11 million, a decrease of Euro 10 million compared to the same period previous year which included a tax benefit. Net income increased Euro 3 million sequentially, despite a decline in income before taxes of Euro 20 million, reflective of a lower effective tax rate.

Cash flow from operating activities during the quarter was negative Euro 353 million, mainly due to inventory investments, non cash items in the income statement and seasonality. New external borrowings of Euro 375 million were made during the quarter to enhance liquidity and growth, resulting in total borrowings of Euro 604 million at the end of the quarter. Total cash balances at March 31, 2011 amounted to Euro 599 million.

Sony Ericsson estimates that its market share for smartphones during the quarter was approximately 5% in units and approximately 3% in value.

Sony Ericsson forecasts modest growth in total units in the global handset market for 2011.

The liquid identity is a registered trademark of Sony Ericsson Mobile Communications AB. Xperia^™ is a trademark of Sony Ericsson Mobile Communications AB. Sony is registered trademark of Sony Corporation. Ericsson is a registered trademark of Telefonaktiebolaget LM Ericsson. Any rights not expressly granted herein are reserved and subject to change without prior notice.

EDITOR’S NOTES:

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

Net sales by market area by quarter

About Sony Ericsson

Sony Ericsson celebrates its 10th year as a joint venture between Sony Corporation and Ericsson in October, 2011. Over the years Sony Ericsson has brought together the best communication technologies with superior entertainment user experiences to create its Xperia^™ line of the ‘most entertaining smartphones’ in the mobile handset industry. With its global corporate functions in London, Sony Ericsson has sales and marketing operations in all major regions of the world, as well as manufacturing in China, and product development sites in China, Japan, Sweden and Silicon Valley, California. For more information, please visit: www.sonyericsson.com/press.

- ENDS –

CONTACTS:

Ericsson investor relations

Susanne Andersson (Stockholm) +46 10 719 4631

Sony investor relations

Yoshinori Hashitani (Tokyo) +81 3 6748 2111

Yas Hasegawa (London) +44 20 7426 8696

 

Sony Ericsson Mobile Communications Management Limited		Sony Ericsson House 202 Hammersmith Road London W6 7DN, United Kingdom		T: +44(0)20 8762 5800 www.sonyericsson.com

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Press / Media

Sony Ericsson global communications and PR

Cathy Davies (London) +44 208 762 5879

Holly Rossetti (London) + 44 208 762 5851

Gustaf Brusewitz (London) +44 208 762 5805

This press release contains forward-looking statements that involve inherent risks and uncertainties. Sony Ericsson has 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.

 

Sony Ericsson Mobile Communications Management Limited		Sony Ericsson House 202 Hammersmith Road London W6 7DN, United Kingdom		T: +44(0)20 8762 5800 www.sonyericsson.com

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Sony Ericsson

CONSOLIDATED INCOME STATEMENT

 

						Jan-Mar
EUR million		2010				2011				Change
Net sales			1,405				1,145				-19	%
Cost of sales			-975				-763				-22	%
Gross profit			429				382				-11	%
Gross margin %			31%				33%				2	%
Research and development expenses			-185				-173				-6	%
Selling and administrative expenses			-238				-199				-16	%
Operating expenses*			-423				-372				-12	%
Other operating income, net			14				10				-29	%
Operating income			20				19				-5	%
Operating margin %			1%				2%				1	%
Financial income			7				3				-57	%
Financial expenses			-9				-8				-11	%
Income before taxes			18				15				-17	%
Taxes			6				-5
Minority interest			-3				1
Net income			21				11				-48	%
Number of units shipped (million)			10.5				8.1				-23	%
ASP (EUR)			134				141				5	%
EUR million			Jan-Mar				Jan-Mar
Restructuring charges			2010				2011
Cost of sales			2				-
Research and development expenses			-2				-
Selling and administrative expenses			-3				-
Total			-3				-

 

*	Operating expenses in 2010 have been restated to reflect certain organizational changes.

 

Sony Ericsson Mobile Communications Management Limited		Sony Ericsson House 202 Hammersmith Road London W6 7DN, United Kingdom		T: +44(0)20 8762 5800 www.sonyericsson.com

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Sony Ericsson

CONSOLIDATED INCOME STATEMENT - ISOLATED QUARTERS

 

		2010																				2011
EUR million		Q1				Q2				Q3				Q4								Q1
Net sales			1,405				1,757				1,603				1,528								1,145
Cost of sales			-975				-1,266				-1,130				-1,069								-763
Gross profit			429				492				473				459								382
Gross margin %			31%				28%				30%				30%								33%
Research and development expenses			-185				-191				-179				-191								-173
Selling and administrative expenses			-238				-272				-241				-236								-199
Operating expenses*			-423				-463				-420				-427								-372
Other operating income, net			14				7				10				7								10
Operating income			20				36				63				39								19
Operating margin %			1%				2%				4%				3%								2%
Financial income			7				2				7				2								3
Financial expenses			-9				-7				-8				-6								-8
Income before taxes			18				31				62				35								15
Taxes			6				-16				-12				-27								-5
Minority interest			-3				-4				-2				0								1
Net income			21				12				49				8								11
Number of units shipped (million)			10.5				11.0				10.4				11.2								8.1
ASP (EUR)			134				160				154				136								141
EUR million		2010																				2011
Restructuring charges		Q1				Q2				Q3				Q4								Q1
Cost of sales			2				-33				-3				2								-
Research and development expenses			-2				-1				5				0								-
Selling and administrative expenses			-3				2				-6				-5								-
Total			-3				-32				-4				-3								-

 

*	Operating expenses in 2010 have been restated to reflect certain organizational changes.

 

Sony Ericsson Mobile Communications Management Limited		Sony Ericsson House 202 Hammersmith Road London W6 7DN, United Kingdom		T: +44(0)20 8762 5800 www.sonyericsson.com

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Sony Ericsson

CONSOLIDATED BALANCE SHEET

 

EUR million		Mar 31 2010				Dec 31 2010				Mar 31 2011
ASSETS
Total fixed and financial assets			791				803				791
Current assets
Inventories			384				460				510
Accounts receivable			849				836				755
Other assets			369				295				304
Other short-term cash investments			537				276				417
Cash and bank			443				329				182
Total current assets			2,582				2,196				2,168
Total assets			3,373				2,999				2,959
SHAREHOLDERS’ EQUITY AND LIABILITIES
Shareholders’ equity			438				532				496
Minority interest			54				42				38
Total equity			492				574				534
Borrowing, Non Current			100				100				0
Other long-term liabilities			37				32				30
Total long-term liabilities			137				132				30
Accounts payable			829				769				701
Borrowing, Current			316				130				604
Other current liabilities			1,599				1,394				1,090
Total current liabilities			2,744				2,293				2,394
Total shareholders’ equity and liabilities			3,373				2,999				2,959
Net cash*			563				375				-5

 

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

 

Sony Ericsson Mobile Communications Management Limited		Sony Ericsson House 202 Hammersmith Road London W6 7DN, United Kingdom		T: +44(0)20 8762 5800 www.sonyericsson.com

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Sony Ericsson

CONSOLIDATED STATEMENT OF CASH FLOWS

 

		Jan-Mar
EUR million		2010				2011
OPERATING
Net income			21				11
Adjustments to reconcile net income to cash			-44				-137
			-23				-127
Changes in operating net assets			-72				-226
Cash flow from operating activities			-94				-353
INVESTING
Investing activities			27				-14
Cash flow from investing activities			27				-14
FINANCING
Financing activities			150				375
Cash flow from financing activities			150				375
Net change in cash			83				8
Cash, beginning of period			878				605
Translation difference in Cash			19				-14
Cash, end of period			980				599

 

Sony Ericsson Mobile Communications Management Limited		Sony Ericsson House 202 Hammersmith Road London W6 7DN, United Kingdom		T: +44(0)20 8762 5800 www.sonyericsson.com

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Sony Ericsson

CONSOLIDATED STATEMENT OF CASH FLOWS - ISOLATED QUARTERS

 

		2010																2011
EUR million		Q1				Q2				Q3				Q4				Q 1
OPERATING
Net income			21				12				49				8				11
Adjustments to reconcile net income to cash			-44				4				-66				-50				-137
			-23				16				-17				-42				-127
Changes in operating net assets			-72				13				-38				-86				-226
Cash flow from operating activities			-94				29				-54				-128				-353
INVESTING
Investing activities			27				-15				2				-18				-14
Cash flow from investing activities			27				-15				2				-18				-14
FINANCING
Financing activities			150				0				- 32				- 178				375
Cash flow from financing activities			150				0				-32				-178				375
Net change in cash			83				15				-85				-324				8
Cash, beginning of period			878				980				1,039				921				605
Translation difference in Cash			19				45				-33				7				-14
Cash, end of period			980				1,039				921				605				599

 

Sony Ericsson Mobile Communications Management Limited		Sony Ericsson House 202 Hammersmith Road London W6 7DN, United Kingdom		T: +44(0)20 8762 5800 www.sonyericsson.com

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Sony Ericsson

NET SALES BY MARKET AREA BY QUARTER

 

EUR million		2010																2011
Isolated quarters		Q1				Q2				Q3				Q4				Q1
Europe, Middle East & Africa *			711				876				837				795				485
Americas			201				223				222				205				151
Asia			493				659				544				528				509
Total			1,405				1,757				1,603				1,528				1,145
*  of which Western Europe			525				668				632				569				307
			2010																2011
Sequential change (%)		Q1				Q2				Q3				Q4				Q1
Europe, Middle East & Africa *			-26	%			23	%			-4	%			-5	%			-39	%
Americas			-9	%			11	%			0	%			-8	%			-26	%
Asia			-12	%			34	%			-17	%			-3	%			-4	%
Total			-20	%			25	%			-9	%			-5	%			-25	%
*  of which Western Europe			-23	%			27	%			-5	%			-10	%			-46	%
			2010																2011
Year over year change (%)		Q1				Q2				Q3				Q4				Q1
Europe, Middle East & Africa *			-27	%			-6	%			-4	%			-18	%			-32	%
Americas			1	%			14	%			-4	%			-8	%			-25	%
Asia			-12	%			17	%			6	%			-6	%			3	%
Total			-19	%			4	%			-1	%			-13	%			-19	%
*  of which Western Europe			-27	%			-1	%			-1	%			-16	%			-42	%
			2010																2011
Year to date		1003				1006				1009				1012				1103
Europe, Middle East & Africa *			711				1,587				2,424				3,219				485
Americas			201				424				646				851				151
Asia			493				1,152				1,695				2,224				509
Total			1,405				3,162				4,765				6,294				1,145
*  of which Western Europe			525				1,193				1,825				2,393				307
			2010																2011
YTD year over year change (%)		1003				1006				1009				1012				1103
Europe, Middle East & Africa *			-27	%			-17	%			-13	%			-14	%			-32	%
Americas			1	%			7	%			3	%			0	%			-25	%
Asia			-12	%			3	%			4	%			1	%			3	%
Total			-19	%			-8	%			-5	%			-7	%			-19	%
*  of which Western Europe			-27	%			-15	%			-10	%			-12	%			-42	%

 

Sony Ericsson Mobile Communications Management Limited		Sony Ericsson House 202 Hammersmith Road London W6 7DN, United Kingdom		T: +44(0)20 8762 5800 www.sonyericsson.com

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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 19, 2011