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 16, 2010

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 16, 2010 regarding “Sony Ericsson reports first quarter 2010 results.”

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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 16, 2010

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PRESS RELEASE				April 16, 2010

Sony Ericsson reports first quarter 2010 results

Q1 Highlights:

 

•

Company returns to profitability in Q1 2010

 

•

ASP rises to Euro 134 as Xperia™ X10 and Vivaz™ start shipping

 

•

Improved cost structure generates better margins

The consolidated financial summary for Sony Ericsson Mobile Communications AB (Sony Ericsson) for the first quarter ended March 31, 2010 is as follows:

 

		Q1 2009			Q4 2009			Q1 2010
Number of units shipped (million)		14.5			14.6			10.5
Sales (Euro m.)		1,736			1,750			1,405
Gross margin (%)		8	%		23	%		31	%
Operating income (Euro m.)		-369			-181			20
Operating margin (%)		-21	%		-10	%		1	%
Restructuring charges (Euro m.)		12			150			3
Operating income excl. restructuring charges (Euro m.)		-357			-32			23
Operating margin excl. restructuring charges (%)		-21	%		-2	%		2	%
Income before taxes (IBT) (Euro m.)		-370			-190			18
IBT excl. restructuring charges (Euro m.)		-358			-40			21
Net income (Euro m.)		-293			-167			21
Average selling price (Euro)		120			120			134

Bert Nordberg, President, Sony Ericsson commented, “We are pleased to see the positive impact of both the launch of new products and the business transformation programme improving the company’s results. The Xperia™ X10, our first android-based Communication Entertainment device featuring signature Sony Ericsson applications Timescape and Mediascape™, and Vivaz™, a beautifully designed, touch-screen Symbian phone started shipping towards the end of the quarter. Both models have been well received by global customers.” He added, “Increases in both gross and operating margins show that we are on the right track to build the correct cost structure for our business organization and strategy. We will continue to work through the transformation programme

to ensure that we are competitive.”

Units shipped in the quarter were 10.5 million, a decrease of 28% compared to the same period last year, reflecting the streamlining of the portfolio over the past 12 months to focus on higher-end phones. Sales for the quarter were Euro 1,405 million, a decrease of 19% year on year. Average selling price (ASP) increased 12% both sequentially and year-on-year to Euro 134 during the quarter due to good sell through of existing models, new flagship phones starting to ship at the end of the quarter and a positive currency effect.

Gross margin rose both sequentially and year-on-year, reflecting a more favourable product mix and the benefit of cost of sales improvements in the past year, including the resolution of certain royalty matters during the quarter.

Income before taxes for the quarter excluding restructuring was a profit of Euro 21 million, illustrating the positive impact of the cost reduction programme.

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The transformation programme, which started in mid-2008, with the aim of reducing annual operating expenses by Euro 880 million is continuing with the full benefit expected during the second half of 2010. Since the start of the programme, Sony Ericsson has reduced its global workforce by approximately 3,150 people to reach a total of 8,450 by March 31, 2010. The total restructuring charges taken to date are Euro 342 million.

As of March 31, 2010, Sony Ericsson retained a net cash position of Euro 563 million.

During the first quarter of 2010, Sony Ericsson obtained additional external funding of Euro 150 million. The funding was guaranteed by the parent companies on a 50/50 basis.

Market share in unit base for the quarter decreased by one percentage point sequentially and is now estimated to be around 4%.

Sony Ericsson maintains a forecast of slight growth in units in the global handset market in 2010.

END

The liquid identity is a registered trademark of Sony Ericsson Mobile Communications AB.

Vivaz™, Mediascape™ and XPERIA™ are trademarks or registered trademarks of Sony Ericsson Mobile Communications AB.

Sony is a 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 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 -

Sony Ericsson is a 50:50 joint venture by Sony and Ericsson established in October 2001, with global corporate functions located in London and operations in all major markets. Sony Ericsson vision is to become the industry leader in Communication Entertainment; where new styles of communicating through the internet and social media, become entertainment. Sony Ericsson offers exciting consumer experiences through phones, accessories, content and applications. For more information please visit, www.sonyericsson.com.

CONTACTS:

Investors / Analysts

Ericsson investor relations

Susanne Andersson (Stockholm) +46 10 719 4631

Andreas Hedemyr (Stockholm) +46 10 714 3748

Sony investor relations

Gen Tsuchikawa (Tokyo) +81 3 6748 2180

Yas Hasegawa (London) +44 20 7426 8696

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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. 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

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Sony Ericsson

CONSOLIDATED INCOME STATEMENT

 

		Jan-Mar
EUR million		2010			2009			Change
Net sales		1,405			1,736			-19	%
Cost of sales		-975			-1,591			-39	%
Gross profit		429			145			196	%
Gross margin %		30.6	%		8.4	%		22	%
Research and development expenses		-216			-303			-29	%
Selling and administrative expenses		-207			-225			-8	%
Operating expenses		-423			-528			-20	%
Other operating income, net		14			13			9	%
Operating income		20			-369			—
Operating margin %		1.4	%		-21.3	%		—
Financial income		7			9			-26	%
Financial expenses		-9			-10			-9	%
Income after financial items		18			-370			—
Taxes		6			84			-93	%
Minority interest		-3			-6			-51	%
Net income		21			-293			—
Number of units shipped (million)		10.5			14.5			-28	%
ASP (EUR)		134			120			12	%
EUR Million		Jan-Mar 2010			Jan-Mar 2009
Restructuring charges
Cost of sales		-2			7
Research and development expenses		2			2
Sales and administrative expenses		3			3
Other operating income, net		0			0
Total		3			12

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Sony Ericsson

CONSOLIDATED INCOME STATEMENT - ISOLATED QUARTERS

 

		2010			2009
EUR million		Q1			Q4			Q3			Q2			Q1
Net sales		1,405			1,750			1,619			1,684			1,736
Cost of sales		-975			-1,341			-1,367			-1,483			-1,591
Gross profit		429			409			252			200			145
Gross margin %		30.6	%		23.4	%		15.5	%		11.9	%		8.4	%
Research and development expenses		-216			-299			-260			-245			-303
Selling and administrative expenses		-207			-299			-205			-235			-225
Operating expenses		-423			-599			-465			-480			-528
Other operating income, net		14			8			21			6			13
Operating income		20			-181			-193			-274			-369
Operating margin %		1.4	%		-10.4	%		-11.9	%		-16.3	%		-21.3	%
Financial income		7			4			3			6			9
Financial expenses		-9			-12			-9			-15			-10
Income after financial items		18			-190			-199			-283			-370
Taxes		6			36			42			74			84
Minority interest		-3			-12			-6			-4			-6
Net income		21			-167			-164			-213			-293
Number of units shipped (million)		10.5			14.6			14.1			13.8			14.5
ASP (EUR)		134			120			114			122			120
EUR Million		2009			2009
		Q1			Q4			Q3			Q2			Q1
Restructuring charges
Cost of sales		-2			41			0			-9			7
Research and development expenses		2			72			1			9			2
Sales and administrative expenses		3			37			1			1			3
Other operating income, net		0			0			0			0			0
Total		3			150			2			1			12

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Sony Ericsson

CONSOLIDATED BALANCE SHEET

 

EUR million		Mar 31 2010		Dec 31 2009		Mar 31 2009
ASSETS
Total fixed and financial assets		791		779		658
Current assets
Inventories		384		358		477
Accounts receivable		849		832		1,193
Other assets		369		415		463
Other short-term cash investments		537		489		574
Cash and bank		443		389		542
Total current assets		2,582		2,483		3,249
Total assets		3,373		3,262		3,908
SHAREHOLDERS’ EQUITY AND LIABILITIES
Shareholders’ equity		438		381		930
Minority interest		54		47		65
Total equity		492		428		995
Borrowing, Non Current		100		0		0
Other long-term liabilities		37		32		30
Total long-term liabilities		137		32		30
Accounts payable		829		852		965
Borrowing, Current		316		258		0
Other current liabilities		1,599		1,692		1,918
Total current liabilities		2,744		2,802		2,882
Total shareholders’ equity and liabilities		3,373		3,262		3,908
Net cash*		563		620		1,116

 

*	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		2010		2009
OPERATIONS
Net income		21		-293
Adjustments to reconcile net income to cash		-44		29
		-23		-263
Changes in operating net assets		-72		321
Cash flow from operating activities		-94		58
INVESTMENTS
Investing activities		27		-19
Cash flow from investing activities		27		-19
FINANCING
Financing activities		150		-53
Cash flow from financing activities		150		-53
Net change in cash		83		-14
Cash, beginning of period		878		1,125
Translation difference in Cash		19		5
Cash, end of period		980		1,116

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Sony Ericsson

CONSOLIDATED STATEMENT OF CASH FLOWS - ISOLATED QUARTERS

 

		2010		2009
EUR million		Q1		Q4		Q3		Q2		Q1
OPERATIONS
Net income		21		-167		-164		-213		-293
Adjustments to reconcile net income to cash		-44		48		20		37		29
		-23		-119		-143		-176		-263
Changes in operating net assets		-72		-97		49		60		321
Cash flow from operating activities		-94		-216		-94		-115		58
INVESTMENTS
Investing activities		27		-10		-42		-13		-19
Cash flow from investing activities		27		-10		-42		-13		-19
FINANCING
Financing activities		150		100		159		0		-53
Cash flow from financing activities		150		100		159		0		-53
Net change in cash		83		-126		22		-128		-14
Cash, beginning of period		878		996		965		1,116		1,125
Translation difference in Cash		19		8		9		-23		5
Cash, end of period		980		878		996		965		1,116

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Sony Ericsson

NET SALES BY MARKET AREA BY QUARTER

EUR million

 

		2010			2009
Isolated quarters		Q1			Q4			Q3			Q2			Q1
Europe, Middle East & Africa *		711			966			875			927			977
Americas		201			222			232			195			200
Asia		493			562			512			562			559
Total		1,405			1,750			1,619			1,684			1,736
* of which Western Europe		525			678			636			678			721
		2010			2009
Sequential change (%)		Q1			Q4			Q3			Q2			Q1
Europe, Middle East & Africa *		-26	%		10	%		-6	%		-5	%		-40	%
Americas		-10	%		-4	%		19	%		-3	%		-69	%
Asia		-12	%		10	%		-9	%		1	%		-12	%
Total		-20	%		8	%		-4	%		-3	%		-40	%
* of which Western Europe		-23	%		7	%		-6	%		-6	%		-35	%
		2010			2009
Year over year change (%)		Q1			Q4			Q3			Q2			Q1
Europe, Middle East & Africa *		-27	%		-41	%		-39	%		-33	%		-35	%
Americas		1	%		-65	%		-67	%		-74	%		-59	%
Asia		-12	%		-12	%		-25	%		-19	%		-23	%
Total		-19	%		-40	%		-42	%		-40	%		-36	%
* of which Western Europe		-27	%		-39	%		-33	%		-25	%		-26	%
		2010			2009
Year to date		1003			0912			0909			0906			0903
Europe, Middle East & Africa *		711			3,744			2,778			1,903			977
Americas		201			850			627			395			200
Asia		493			2,194			1,633			1,121			559
Total		1,405			6,788			5,038			3,419			1,736
* of which Western Europe		525			2,714			2,036			1,400			721
		2010			2009
YTD year over year change (%)		1003			0912			0909			0906			0903
Europe, Middle East & Africa *		-27	%		-37	%		-35	%		-34	%		-35	%
Americas		1	%		-67	%		-67	%		-68	%		-59	%
Asia		-12	%		-20	%		-22	%		-21	%		-23	%
Total		-19	%		-40	%		-40	%		-38	%		-36	%
* of which Western Europe		-27	%		-31	%		-28	%		-26	%		-26	%