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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

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FORM 6-K

 

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REPORT OF FOREIGN ISSUER

Pursuant to Rule 13a-16 or 15d-16 of

the Securities Exchange Act of 1934

April 20, 2007

 

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LM ERICSSON TELEPHONE COMPANY

(Translation of registrant’s name into English)

 

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Torshamnsgatan 23, Kista

SE-164 83, Stockholm, Sweden

(Address of principal executive offices)

 

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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

 

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Announcement of LM Ericsson Telephone company, dated April 20, 2007 regarding “Sony Ericsson starts 2007 with strong first quarter”.

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PRESS RELEASE		April 20, 2007

Sony Ericsson starts 2007 with strong first quarter

Q1 Highlights:

 

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Year-on-year volume & sales growth of 63% and 47% respectively

 

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Income before tax rose 139% year-on-year to €362 million

 

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W880 further strengthens Walkman® phone sales

 

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Low and mid-tier products generating market share gains year-on-year

The consolidated financial summary for Sony Ericsson Mobile Communications AB (Sony Ericsson) for the first quarter ended March 31, 2007 is as follows:

 

		Q1 2006			Q4 2006			Q1 2007
Number of units shipped (million)		13.3			26.0			21.8
Sales (Euro m.)		1,992			3,782			2,925
Gross Margin %		26.3	%		29.0	%		30.3	%
Operating Income (Euro m.)		143			484			346
Operating Margin %		7.2	%		12.8	%		11.8	%
Income Before Taxes (Euro m.)		151			502			362
Net income (Euro m.)		109			447			254
Average Sales Price (Euro)		149			146			134

Beginning this quarter Sony Ericsson is expanding its financial disclosure. More information can be found at the end of this report. This decision was made as a result of the company’s continuing growth and in consultation with the parent companies.

Units shipped in the quarter reached 21.8 million, a 63% increase compared to the same period last year, generating significant year-on-year market share gains and continuing the momentum of 2006. Sales for the quarter were Euro 2,925 million, representing a year-on-year increase of 47%. Income before taxes for the quarter was Euro 362 million representing a year-on-year increase of 139%. Net income for the quarter was Euro 254 million. ASP decreased to Euro 134 as we continue to expand our product portfolio successfully with mid-tier and with more competitively priced phones.

“Sony Ericsson has made a very positive start to the year selling 63% more phones in the first quarter than a year ago. The strong sales and solid financial performance demonstrate a continuation of the momentum we established last year,” said Miles Flint, President of Sony Ericsson. “We have announced a number of exciting new products during the quarter many of which are already shipping and have been well received by consumers. The company continues to develop hit model products with a clear consumer proposition that appeals to operators, and then rapidly ramp-up volume to meet market demand,” he added.

Sony Ericsson continued to build on the success of 2006 with strong growth in Asia Pacific, Latin America and Europe. The company captured market share in these markets through low and mid-tier products such as the W300 and W200 Walkman^® phones and the K310 camera phone without undermining profitability. Margins improved year-on-year despite the increased proportion of mid and low tier products in the line-up illustrating management’s focus on controlling cost and maintaining margins while expanding Sony Ericsson’s appeal to a wider market.

 

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Sony Ericsson also announced a number of attractive new products during the quarter, including two new Cyber-shot™ phones, five additional Walkman^® models across a variety of price points to further strengthen its unique music offering, and its first HSDPA handset aimed primarily at the North American market.

In February in Japan Sony Ericsson started shipping the SO703i, a mobile phone with selectable Style-Up panels that include a scented sheet to match the panel’s design, for NTT DoCoMo, and the W51S, a new clam-shell phone with illuminated icons, for au (KDDI). Both phones were well received by consumers.

During the quarter Sony Ericsson made a number of strategic announcements:

Following the rapid growth in sales in the Asia Pacific region, the company announced plans to start manufacturing phones in India through its global manufacturing partners, Flextronics and Foxconn.

In February Sony Ericsson announced it had completed the acquisition of the Swedish software company UIQ Technology AB, and established a separate holding company, UIQ Holdings, to manage the business.

In March Sony Ericsson signed licensing and development agreements concerning entry-level GSM, GPRS and EDGE mobile phones with Sagem Communication (SAFRAN Group). Through this co-operation, Sony Ericsson will be able to strengthen its position in the entry level area of the market.

Sony Ericsson forecasts that the 2007 global handset market will be above 1.1 billion units. The company believes that in Q1 2007 it grew market share around 2 percentage points compared with the same period last year to over 8%.

Sony Ericsson will make a total payment of Euro 848 million to its parent companies in 2007 in the form of dividends, or both a dividend and a capital redemption.

WALKMAN^® and Cyber-shot™ are trademarks or registered trademarks of Sony Corporation.

Style-Up is a trademark or a registered trademark of Sony Ericsson Mobile Communications AB.

- ENDS -

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

 

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Sony Ericsson Mobile Communications serves the global communications market with innovative and feature-rich mobile phones, accessories and PC-cards. Established as a joint venture by Sony and Ericsson in 2001, with global corporate functions located in London, the company employs over 7,500 people worldwide, including R&D sites in Europe, Japan, China and America. Sony Ericsson celebrated the 5th anniversary of the start of the joint venture on 1st October, 2006.

Sony Ericsson is the global title sponsor of the Women's Tennis Association, and works with the Association to promote the Sony Ericsson WTA Tour in over 80 cities during the year. For more information on Sony Ericsson, please visit www.sonyericsson.com

CONTACTS:

Press/Media

Sony Ericsson Corporate Communications

Aldo Liguori (London) +44 208 762 5860

Merran Wrigley (London) +44 208 762 5862

Investors/Analysts

Ericsson Investor Relations

Gary Pinkham (Stockholm) +46 8 719 0858

Sony Investor Relations

Takao Yuhara (Tokyo) +81 3 6748 2180

Shinji Tomita (London) +44 207 444 9713

Sony Ericsson Media and Analyst Conference Call - Q1 2007 Business Update

20 April , 2007 (following Q1 07 Results released at 7:30 am UK time hosted by Miles Flint, President of Sony Ericsson Mobile Communications

8:00 am UK time

9:00 am Central European time (CET)

3:00 am Eastern Time US (EST)

4:00 pm Japan time (JST)

Webcast:

A live webcast of the conference call will be available at http://www.ericsson.com/ericsson/investors/

Or please click here to join the webcast directly:

http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=181700&eventID=1522431

The archived webcast will be available approximately 1 hour after the completion of the conference call.

Call-in Numbers:

UK & Europe: +44 (0) 20 7138 0809

Sweden: +46 (0) 8 5876 9445

US: +1 718 354 1158

Japan: +81 (0) 3 3570 8242

This press release contains forward-looking statements that involve inherent risks and uncertainties. We have 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-March
EUR million		2007			2006			Change
Net sales		2,925			1,992			47	%
Cost of sales		-2,039			-1,469			39	%
Gross margin		886			524			69	%
Gross margin %		30.3	%		26.3	%		4	%
Research and development expenses		-261			-202			29	%
Selling and administrative expenses		-284			-186			52	%
Operating expenses		-545			-388			40	%
Other operating income, net		5			7			-30	%
Operating income		346			143			142	%
Operating margin %		11.8	%		7.2	%		5	%
Financial income		18			9			109	%
Financial expenses		-2			0			—
Income after financial items		362			151			139	%
Taxes		-100			-34			193	%
Minority interest		-9			-9			2	%
Net income		254			109			133	%
Number of units shipped (million)		21.8			13.3			63	%
ASP (EUR)		134			149			-10	%

 

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Sony Ericsson

CONSOLIDATED INCOME STATEMENT – ISOLATED QUARTERS

 

		2007			2006
EUR million		Q1			Q4			Q3			Q2			Q1
Net sales		2,925			3,782			2,913			2,272			1,992
Cost of sales		-2,039			-2,686			-1,995			-1,625			-1,469
Gross margin		886			1,096			917			647			524
Gross margin %		30.3	%		29.0	%		31.5	%		28.5	%		26.3	%
Research and development expenses		-261			-256			-225			-223			-202
Selling and administrative expenses		-284			-367			-287			-246			-186
Operating expenses		-545			-623			-511			-470			-388
Other operating income, net		5			10			21			26			7
Operating income		346			484			427			203			143
Operating margin %		11.8	%		12.8	%		14.6	%		8.9	%		7.2	%
Financial income		18			19			8			8			9
Financial expenses		-2			0			-1			0			0
Income after financial items		362			502			433			211			151
Taxes		-100			-43			-127			-64			-34
Minority interest		-9			-12			-8			-5			-9
Net income		254			447			298			143			109
Number of units shipped (million)		21.8			26.0			19.8			15.7			13.3
ASP (EUR)		134			146			147			145			149

 

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Sony Ericsson

CONSOLIDATED BALANCE SHEET

 

EUR million		Mar 31 2007		Dec 31 2006		Sept 30 2006		Jun 30 2006		Mar 31 2006		Dec 31 2005
ASSETS
Total fixed and financial assets		495		469		316		311		306		274
Current assets
Inventories		498		437		578		318		277		306
Accounts receivable		1,566		1,653		1,347		1,101		908		852
Other assets		859		310		249		196		200		178
Other short-term cash investments		1,376		1,580		1,098		897		861		900
Cash and bank		668		693		763		698		568		637
Total current assets		4,968		4,673		4,035		3,210		2,813		2,873
Total assets		5,463		5,141		4,351		3,521		3,119		3,147
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' equity		2,033		1,781		1,353		1,048		921		1,070
Minority interest		55		45		37		59		59		46
Total equity		2,088		1,826		1,391		1,106		980		1,116
Total long-term liabilities		22		20		17		17		17		19
Accounts payable		1,316		1,276		1,118		954		799		807
Other current liabilities		2,037		2,019		1,825		1,444		1,323		1,204
Total current liabilities		3,353		3,296		2,944		2,398		2,122		2,011
Total shareholders' equity and liabilities		5,463		5,141		4,351		3,521		3,119		3,147
Net cash*		2,045		2,272		1,795		1,556		1,417		1,530

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

 

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Sony Ericsson

CONSOLIDATED STATEMENT OF CASH FLOWS

 

		Jan-Mar
EUR million		2007		2006
OPERATIONS
Net income		254		109
Adjustments to reconcile net income to cash		24		20
		278		129
Changes in operating net assets *		-454		53
Cash flow from operating activities		-176		182
INVESTMENTS
Investing activities		-49		-43
Cash flow from investing activities		-49		-43
FINANCING
Financing activities		- 1		- 236
Cash flow from financing activities		-1		-236
Net change in cash		-226		-97
Cash, beginning of period		2,273		1,537
Translation difference in Cash		-2		-12
Cash, end of period		2,045		1,428

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*	Includes an advanced payment to Ericsson for an amount equivalent to Ericsson’s share of the dividend/redemption.

 

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Sony Ericsson

CONSOLIDATED STATEMENT OF CASH FLOWS - ISOLATED QUARTERS

 

		Jan-Mar		Oct-Dec		Jul-Sep		Apr-Jun		Jan-Mar
EUR million		2007		2006		2006		2006		2006
OPERATIONS
Net income		254		447		298		143		109
Adjustments to reconcile net income to cash		24		23		20		22		20
		278		470		318		165		129
Changes in operating net assets		-454		50		-21		18		53
Cash flow from operating activities		-176		520		297		183		182
INVESTMENTS
Investing activities		-49		-26		-36		-29		-43
Cash flow from investing activities		-49		-26		-36		-29		-43
FINANCING
Financing activities		- 1		- 66		- 2		26		-236
Cash flow from financing activities		-1		-66		-2		26		-236
Net change in cash		-226		428		259		180		-97
Cash, beginning of period		2,273		1,861		1,595		1,428		1,537
Translation difference in Cash		-2		-16		7		-13		-12
Cash, end of period		2,045		2,273		1,861		1,595		1,428

 

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Sony Ericsson

NET SALES BY MARKET AREA BY QUARTER

EUR million

 

		2007			2006
Isolated quarters		Q1			Q4			Q3			Q2			Q1
Europe, Middle East & Africa *		1,598			2,145			1,600			1,090			1,029
Americas		365			555			417			328			250
Asia		961			1,082			896			853			713
Total		2,925			3,782			2,913			2,272			1,992
* of which Western Europe		1,078			1,478			1,115			748			674
		2007			2006
Sequential change (%)		Q1			Q4			Q3			Q2			Q1
Europe, Middle East & Africa *		-26	%		34	%		47	%		6	%		-27	%
Americas		-34	%		33	%		27	%		31	%		-19	%
Asia		-11	%		21	%		5	%		20	%		20	%
Total		-23	%		30	%		28	%		14	%		-14	%
* of which Western Europe		-27	%		33	%		49	%		11	%		-35	%
		2007			2006
Year over year change (%)		Q1			Q4			Q3			Q2			Q1
Europe, Middle East & Africa *		55	%		52	%		35	%		43	%		71	%
Americas		46	%		79	%		77	%		53	%		53	%
Asia		35	%		83	%		42	%		33	%		36	%
Total		47	%		64	%		42	%		41	%		55	%
* of which Western Europe		60	%		45	%		33	%		42	%		84	%
		2007			2006
Year to date		0703			0612			0609			0606			0603
Europe, Middle East & Africa *		1,598			5,865			3,720			2,120			1,029
Americas		365			1,550			995			578			250
Asia		961			3,544			2,462			1,566			713
Total		2,925			10,959			7,177			4,264			1,992
* of which Western Europe		1,078			4,014			2,537			1,422			674
		2007			2006
YTD year over year change (%)		0703			0612			0609			0606			0603
Europe, Middle East & Africa *		55	%		48	%		46	%		56	%		71	%
Americas		46	%		68	%		62	%		53	%		53	%
Asia		35	%		48	%		37	%		35	%		36	%
Total		47	%		51	%		45	%		47	%		55	%
* of which Western Europe		60	%		46	%		46	%		59	%		84	%

 

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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 20, 2007