Ericsson shares slump 6% as US slowdown weighs
Mobile telecom gear maker Ericsson - the world number one mobile network equipment maker - posted third-quarter operating profit below expectations on Thursday as CEO Hans Vestberg told CNBC that the maturing of mobile broadband projects in the United States has hit sales growth.
"North America projects peaked in second quarter," he told CNBC Thursday. "Right now they are slowing down, they have peaked...(but) they have not stopped."
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Projects by the Swedish company to make wireless carriers' networks speedier are now nearing completion after delivering strong growth for the company in the last six quarters, but Vestberg added that the Ericsson is still in a "very good position" in the continent - a market that is the most innovative when it comes to 4G and new handsets, he said.
Earnings before interest and tax were 4.2 billion crowns ($658 million) compared to 3.1 billion in the year-ago quarter, including the company's joint ventures, missing a mean forecast of 4.5 billion in a Reuters poll of analysts. The gross margin was 32.0 percent against a forecast of 32.9 percent. Shares had tanked 6.82 percent by mid-morning trade on Thursday.
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Vestberg also blamed reduced activity in Japan, lamenting a weaker yen - which he said had fallen by around 20 percent in the quarter against the Swedish krona.
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