Must-know positions traded by CalPERS via 4Q 13F filing (Part 5 of 10)
CalPERS adds new position in Ericsson
CalPERS added a stake in LM Ericsson Telephone Company (ERIC) that accounted for 0.02% of the pension fund’s total portfolio for the quarter ended in December 2014.
Overview of Ericsson
Ericsson is a provider of communications networks, telecom services, and support solutions. Founded in 1876, the company has its headquarters in Stockholm, Sweden. Net sales in 2014 were 228.0 billion Swedish krona ($33.1 billion). Ericsson is listed on NASDAQ OMX stock exchange in Stockholm and the NASDAQ in New York. The company has four operating segments:
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Networks delivers products and solutions for mobile access, Internet Protocol (or IP), and transport networks and core networks.
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Global Services delivers managed services, product-related services, consulting and systems integration services, and broadcast services.
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Support Solutions provides enablers and applications for operators.
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Modems performs design, development, and sales of the LTE (or Long-Term Evolution) multimode thin modem solutions, including 2G, 3G, and 4G interoperability.
Ericsson has a robust patent portfolio
Ericsson noted in its annual filing that it is expanding into the Information and Communications Technology (or ICT) arena, and becoming a major ICT solutions provider. The company has more than 35,000 granted patents, and has one of the industry’s strongest patent portfolios. It has signed more than 100 patent-licensing agreements with most major players in the industry.
Apple and Ericsson are involved in a legal dispute over LTE wireless technology patents. The global license agreement between Ericsson and Apple for mobile technology has expired, and Apple has declined to take a new license on “offered fair, reasonable, and non-discriminatory (or FRAND) terms.” Ericsson’s full-year 2014 IPR (intellectual property rights) and licensing revenues amounted to 9.9 billion krona ($10.6 billion).
Ericsson sees slowing sales in North America
Ericsson posted 4Q14 net sales of 67.99 billion krona ($8.2 billion), up 1% from the period a year ago. Weak sales in North America were partially offset by robust sales growth in many markets in the Middle East, Europe, and Asia. Ericsson noted that in North America, its “business activity slowed further in the quarter as operators remained focused on cash flow optimization in order to finance major acquisitions and spectrum auctions.” Ericsson’s net profit of 4.22 billion krona, or 1.29 krona a share, fell 35% year-over-year.