Ericsson reported that profit doubled last year as revenues remained at 2012 levels.
2013 sales hit €25.7 billion but profits grew by 105 percent to €1.4 billion thanks in part to the news earlier this week that it had settled a patent dispute with Samsung that boosted Q4 net income by €373 million.
The deal also boosted Q4 revenues by €490 million. CFO Jan Frykhammar told European Communications that the agreement with one of the world’s largest equipment manufacturers was “extremely important”.
In a sign of its growing confidence and what Frykhammar described as a “very strong” balance sheet, Ericsson upped its 2013 dividend by nine percent.
On its principal networks business, which recorded flat 2013 revenues, the Sweden-based vendor said operator focus on improving network performance and new service opportunities were the main drivers for 4G LTE and mobile broadband investments throughout the year.
It cited “a recent investment announcement made by one of the large operators” – most likely Vodafone’s decision to invest €8.2 billion over the next two years – as a reason why the telecom industry in Europe is expected to improve this year.
Meanwhile, “growing momentum” for IT-related business should boost Ericsson’s Global Services business, which also recorded flat revenues in 2013, next year.
The company’s Support Solutions business saw 2013 sales decrease by nine percent, but Ericsson said this was down to currency fluctuations. Demand for OSS and BSS “continues to be strong” it claimed.
Ericsson has also started to break out its modem activities as a separate business unit following the closure earlier this year of its joint venture with STMicroelectronics. It recorded a small operating loss due to R&D expenses.
Frykhammar said he looked forward to announcing some “important” wins in this area during 2014 following the launch of its M7450 product.
More widely, the CFO said the challenges for this year included selling into new areas, such as broadcast and IP, enhancing the quality of wireless infrastructure in mature markets and continuing 4G LTE roll outs in areas such as China and Russia.
In a statement, CEO Hans Vestberg promised to “gradually increase resource and capital allocation” in modems, IPTV, IP, cloud, OSS and BSS.