Form 6-K

Sony Ericsson

Sony Ericsson House

Mobile Communications

202 Hammersmith Road

T: +44 (0)20 8762 5800

Management Limited

London W6 7DN, United Kingdom

www.sonyericsson.com

6-K 1 d6k.htm FORM 6-K Form 6-K

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

January 20, 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 January 20, 2011 regarding “Sony Ericsson reports fourth quarter and full year 2010 results”

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.


TELEFONAKTIEBOLAGET LM ERICSSON (publ)

By:		/S/ NINA MACPHERSON
		Nina Macpherson
		Senior Vice President and
		General Counsel

By:		/S/ HENRY STÉNSON
		Henry Sténson
		Senior Vice President
		Corporate Communications

Date: January 20, 2011

LOGO


PRESS RELEASE		January 20, 2011

Sony Ericsson reports fourth quarter and full year 2010 results

Highlights:

•

Four consecutive quarters of profitability during 2010

•

Improvement of Euro 1.1 billion of income before taxes, excluding restructuring charges, for the full year

•

Over 9 million Android-based Xperia™ phones shipped since launch

The consolidated financial summary for Sony Ericsson Mobile Communications AB (Sony Ericsson) for the fourth quarter and full year ended December 31, 2010 is as follows:


	Q4 2009			Q3 2010			Q4 2010			FY 2009			FY 2010
Number of units shipped (million)		14.6			10.4			11.2			57.1			43.1
Sales (Euro m.)		1,750			1,603			1,528			6,788			6,294
Gross margin (%)		23	%		30	%		30	%		15	%		29	%
Operating income (Euro m.)		-181			63			39			-1,018			159
Operating margin (%)		-10	%		4	%		3	%		-15	%		3	%
Restructuring charges (Euro m.)		-150			-4			-3			-164			-42
Operating income excl. restructuring charges (Euro m.)		-32			67			43			-854			202
Operating margin excl. restructuring charges (%)		-2	%		4	%		3	%		-13	%		3	%
Income before taxes (IBT) (Euro m.)		-190			62			35			-1,043			147
IBT excl. restructuring charges (Euro m.)		-40			66			39			-878			189
Net income (Euro m.)		-167			49			8			-836			90

Average selling price (Euro)		120			154			136			119			146

Bert Nordberg, President & CEO of Sony Ericsson commented, “2010 was a turnaround year for Sony Ericsson. Our four consecutive quarters of profit reflect the success of our shift towards an Android-based smartphone portfolio. We will celebrate the 10th anniversary of the creation of Sony Ericsson in 2011, and as shown by the recently announced Xperia™ arc, we will continue to focus on delivering the most entertaining smartphones worldwide.”

Income before taxes, excluding restructuring charges, was Euro 189 million for the full year 2010, compared with a loss of Euro 878 million in 2009. The improvement of approximately Euro 1.1 billion was driven by the success of a streamlined product portfolio focused on higher-end smartphones and an improved cost structure. Sales for the full year 2010 were Euro 6,294 million, a decrease of 7% from 2009, while gross margin improved from 15% in 2009 to 29%, in 2010.

During 2010 Sony Ericsson completed its company-wide transformation programme, improving its cost of sales ratio, reducing its global workforce by approximately 4,000 people in total, consolidating its facilities worldwide and decreasing annual operating expenses by more than Euro 880 million. The total restructuring charges for the transformation programme were Euro 381 million.

VAT Number GB781457994. Registered in England Number 4257114

Units shipped during the fourth quarter were 11.2 million, a year-on-year decrease of 23%, consistent with the streamlining of the portfolio to focus on higher-end smartphones. The sequential increase of 8%, related to seasonal factors, was somewhat constrained by a lack of new product launches during the quarter. Average selling price (ASP) for the quarter was Euro 136, a 13% increase year-on-year. ASP decreased 12% sequentially, mainly due to price erosion, foreign exchange and product mix. Sales for the quarter were Euro 1,528 million, a decrease of 13% year-on-year and a decrease of 5% sequentially.

The gross margin for the fourth quarter was 30%, an increase of 7 percentage points year-on-year and essentially flat sequentially, including the benefit of some one-time items, relating to certain royalty matters and warranty estimates.

Income before taxes for the fourth quarter, excluding restructuring charges, was a profit of Euro 39 million, an increase of Euro 79 million year-on-year and a decrease of Euro 27 million sequentially, mainly due to lower sales.

Sony Ericsson’s net cash position as of December 31, 2010 was Euro 375 million. The negative cash flow from operating activities for the quarter was Euro 128 million, mainly due to increases in inventory due to seasonal factors as well as payments related to the transformation programme.

During the quarter term loan facilities of Euro 150 million matured and were repaid in full.

Sony Ericsson estimates that the global handset market for the full year 2010 increased slightly in volume to almost 1.2 billion units. The company estimates that the global handset market for the fourth quarter was essentially flat year-on-year and its market share for the fourth quarter was approximately 3% in units and approximately 5% in value. Sony Ericsson estimates that its market share for the full year 2010 was approximately 4% in units and approximately 6% in value.

Sony Ericsson forecasts modest growth in 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 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:

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

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’s 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 .

- ENDS –

VAT Number GB781457994. Registered in England Number 4257114

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

Press / Media

Sony Ericsson global communications and PR

Aldo Liguori (London) +44 20 8762 5860

Gustaf Brusewitz (London) +44 7960 58 19 68

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.

VAT Number GB781457994. Registered in England Number 4257114

Sony Ericsson

CONSOLIDATED INCOME STATEMENT


	Oct-Dec									Jan-Dec
EUR million	2009			2010			Change			2009			2010			Change
Net sales		1,750			1,528			-13	%		6,788			6,294			-7	%
Cost of sales		-1,341			-1,069			-20	%		-5,782			-4,440			-23	%
Gross profit		409			459			12	%		1,006			1,853			84	%
Gross margin %		23	%		30	%		7	%		15	%		29	%		14	%

Research and development expenses		-299			-214			-28	%		-1,108			-840			-24	%
Selling and administrative expenses		-299			-212			-29	%		-964			-893			-7	%
Operating expenses		-599			-427			-29	%		-2,072			-1,732			-16	%

Other operating income, net		8			7			-13	%		48			38			-21	%
Operating income		-181			39						-1,018			159
Operating margin %		-10	%		3	%					-15	%		3	%

Financial income		4			2			-50	%		21			18			-14	%
Financial expenses		-12			-6			-50	%		-46			-30			-35	%
Income before taxes		-190			35						-1,043			147

Taxes		36			-27						236			-48
Minority interest		-12			0						-29			-9			-69	%
Net income		-167			8						-836			90

Number of units shipped (million)		14.6			11.2			-23	%		57.1			43.1			-25	%
ASP (EUR)		120			136			13	%		119			146			23	%

EUR million		Oct-Dec									Jan-Dec
Restructuring charges		2009			2010						2009			2010
Cost of sales		-41			2						-39			-32
Research and development expenses		-72			0						-84			7
Sales and administrative expenses		-37			-5						-41			-17
Total		-150			-3						-164			-42

VAT Number GB781457994. Registered in England Number 4257114

Sony Ericsson

CONSOLIDATED INCOME STATEMENT - ISOLATED QUARTERS


	2009												2010
EUR million	Q1			Q2			Q3			Q4			Q1			Q2			Q3			Q4
Net sales		1,736			1,684			1,619			1,750			1,405			1,757			1,603			1,528
Cost of sales		-1,591			-1,483			-1,367			-1,341			-975			-1,266			-1,130			-1,069

Gross profit		145			200			252			409			429			492			473			459
Gross margin %		8	%		12	%		16	%		23	%		31	%		28	%		30	%		30	%

Research and development expenses		-303			-245			-260			-299			-216			-218			-191			-214
Selling and administrative expenses		-225			-235			-205			-299			-207			-245			-228			-212

Operating expenses		-528			-480			-465			-599			-423			-463			-420			-427

Other operating income, net		13			6			21			8			14			7			10			7

Operating income		-369			-274			-193			-181			20			36			63			39
Operating margin %		-21	%		-16	%		-12	%		-10	%		1	%		2	%		4	%		3	%

Financial income		9			6			3			4			7			2			7			2
Financial expenses		-10			-15			-9			-12			-9			-7			-8			-6

Income before taxes		-370			-283			-199			-190			18			31			62			35

Taxes		84			74			42			36			6			-16			-12			-27
Minority interest		-6			-4			-6			-12			-3			-4			-2			0

Net income		-293			-213			-164			-167			21			12			49			8

Number of units shipped (million)		14.5			13.8			14.1			14.6			10.5			11.0			10.4			11.2
ASP (EUR)		120			122			114			120			134			160			154			136

EUR million	2009												2010
Restructuring charges	Q1			Q2			Q3			Q4			Q1			Q2			Q3			Q4
Cost of sales		-7			9			0			-41			2			-33			-3			2
Research and development expenses		-2			-9			-1			-72			-2			-1			10			0
Sales and administrative expenses		-3			-1			-1			-37			-3			2			-11			-5
Total		-12			-1			-2			-150			-3			-32			-4			-3

VAT Number GB781457994. Registered in England Number 4257114

Sony Ericsson

CONSOLIDATED BALANCE SHEET


	Dec 31		Jun 30		Sep 30		Dec 31
EUR million	2009		2010		2010		2010
ASSETS

Total fixed and financial assets		779		836		813		803

Current assets
Inventories		358		467		457		460
Accounts receivable		832		1,063		986		836
Other assets		415		412		328		295
Other short-term cash investments		489		477		440		276
Cash and bank		389		562		482		329

Total current assets		2,483		2,981		2,692		2,196


Total assets		3,262		3,817		3,505		2,999


SHAREHOLDERS’ EQUITY AND LIABILITIES

Shareholders’ equity		381		510		480		532
Minority interest		47		66		62		42

Total equity		428		575		541		574

Borrowing, Non Current		0		101		100		100
Other long-term liabilities		32		40		30		32

Total long-term liabilities		32		141		130		132

Accounts payable		852		973		922		769
Borrowing, Current		258		329		284		130
Other current liabilities		1,692		1,798		1,628		1,394

Total current liabilities		2,802		3,101		2,834		2,293


Total shareholders’ equity and liabilities		3,262		3,817		3,505		2,999


Net cash*		620		609		538		375

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

VAT Number GB781457994. Registered in England Number 4257114

Sony Ericsson

CONSOLIDATED STATEMENT OF CASH FLOWS


	Oct-Dec				Jan-Dec
EUR million	2009		2010		2009		2010
OPERATING
Net income		-167		8		-836		90
Adjustments to reconcile net income to cash		48		-50		135		-156

		-119		-42		-701		-65

Changes in operating net assets		-97		-86		333		-183

Cash flow from operating activities		-216		-128		-368		-248
INVESTING
Investing activities		-10		-18		-84		-4

Cash flow from investing activities		-10		-18		-84		-4

FINANCING
Financing activities		100		- 178		205		- 60

Cash flow from financing activities		100		-178		205		-60

Net change in cash		-126		-324		-247		-312
Cash, beginning of period		996		921		1,125		878
Translation difference in Cash		8		7		-1		38

Cash, end of period		878		605		878		605

VAT Number GB781457994. Registered in England Number 4257114

Sony Ericsson

CONSOLIDATED STATEMENT OF CASH FLOWS - ISOLATED QUARTERS


	2009								2010
EUR million	Q1		Q2		Q3		Q4		Q1		Q2		Q3		Q4
OPERATING
Net income		-293		-213		-164		-167		21		12		49		8
Adjustments to reconcile net income to cash		29		37		20		48		-44		4		-66		-50

		-263		-176		-143		-119		-23		16		-17		-42

Changes in operating net assets		321		60		49		-97		-72		13		-38		-86

Cash flow from operating activities		58		-115		-94		-216		-94		29		-54		-128

INVESTING
Investing activities		-19		-13		-42		-10		27		-15		2		-18

Cash flow from investing activities		-19		-13		-42		-10		27		-15		2		-18

FINANCING
Financing activities		- 53		0		159		100		150		0		- 32		- 178

Cash flow from financing activities		-53		0		159		100		150		0		-32		-178

Net change in cash		-14		-128		22		-126		83		15		-85		-324
Cash, beginning of period		1,125		1,116		965		996		878		980		1,039		921
Translation difference in Cash		5		-23		9		8		19		45		-33		7

Cash, end of period		1,116		965		996		878		980		1,039		921		605

VAT Number GB781457994. Registered in England Number 4257114

Sony Ericsson

NET SALES BY MARKET AREA BY QUARTER

EUR million


	2009												2010
Isolated quarters	Q1			Q2			Q3			Q4			Q1			Q2			Q3			Q4
Europe, Middle East & Africa *		977			927			875			966			711			876			837			795

Americas		200			195			232			222			201			223			222			205

Asia		559			562			512			562			493			659			544			528

Total		1,736			1,684			1,619			1,750			1,405			1,757			1,603			1,528
* of which Western Europe		721			678			636			678			525			668			632			569

	2009												2010
Sequential change (%)	Q1			Q2			Q3			Q4			Q1			Q2			Q3			Q4
Europe, Middle East & Africa *		-40	%		-5	%		-6	%		10	%		-26	%		23	%		-4	%		-5	%

Americas		-69	%		-3	%		19	%		-4	%		-9	%		11	%		0	%		-8	%

Asia		-12	%		1	%		-9	%		10	%		-12	%		34	%		-17	%		-3	%

Total		-40	%		-3	%		-4	%		8	%		-20	%		25	%		-9	%		-5	%
* of which Western Europe		-35	%		-6	%		-6	%		7	%		-23	%		27	%		-5	%		-10	%

	2009												2010
Year over year change (%)	Q1			Q2			Q3			Q4			Q1			Q2			Q3			Q4
Europe, Middle East & Africa *		-35	%		-33	%		-39	%		-41	%		-27	%		-6	%		-4	%		-18	%

Americas		-59	%		-74	%		-67	%		-65	%		1	%		14	%		-4	%		-8	%

Asia		-23	%		-19	%		-24	%		-12	%		-12	%		17	%		6	%		-6	%

Total		-36	%		-40	%		-42	%		-40	%		-19	%		4	%		-1	%		-13	%

* of which Western Europe		-26	%		-25	%		-33	%		-39	%		-27	%		-1	%		-1	%		-16	%

	2009												2010
Year to date	0903			0906			0909			0912			1003			1006			1009			1012

Europe, Middle East & Africa *		977			1,903			2,778			3,744			711			1,587			2,424			3,219

Americas		200			395			627			850			201			424			646			851

Asia		559			1,121			1,633			2,194			493			1,152			1,695			2,224

Total		1,736			3,419			5,038			6,788			1,405			3,162			4,765			6,294
* of which Western Europe		721			1,400			2,036			2,714			525			1,193			1,825			2,393

	2009												2010
YTD year over year change (%)	0903			0906			0909			0912			1003			1006			1009			1012
Europe, Middle East & Africa *		-35	%		-34	%		-35	%		-37	%		-27	%		-17	%		-13	%		-14	%

Americas		-59	%		-68	%		-68	%		-67	%		1	%		7	%		3	%		0	%

Asia		-23	%		-21	%		-22	%		-20	%		-12	%		3	%		4	%		1	%

Total		-36	%		-38	%		-40	%		-40	%		-19	%		-8	%		-5	%		-7	%
* of which Western Europe		-26	%		-25	%		-28	%		-31	%		-27	%		-15	%		-10	%		-12	%

VAT Number GB781457994. Registered in England Number 4257114