Ericsson Profit Up, Guidance Weak
Swedish mobile telecom equipment maker Ericsson reported a rise in fourth-quarter profit Friday, but the company's view of 2007 results was a little softer than anticipated.
Ericsson reported net income of 9.7 billion SEK ($1.39 billion), or 0.61 SEK a share, for the three months ended December, up from 8.54 billion SEK, or 0.54 SEK a share, in the same quarter a year ago.
Twenty European analysts surveyed by Thomson Financial, on average, predicted a profit of 0.55 SEK a share. The 14 U.S. analysts surveyed by Thomson anticipated earnings of 73 cents a share, but U.S. dollar figures were not immediately available.
Fourth-quarter sales rose 17.5% from the year-ago period to 53.7 billion SEK ($7.73 billion), higher than the $7.34 billion U.S. analysts predicted.
But Ericsson also said it now that growth in the key GSM/WCDMA mobile phone market would rise in the mid-single digits this year, compared with previous guidance of 5% to 9% growth.
"A pretty weak report and what sticks out most is the guidance for the next
year," Jan Ihrfelt of Swedbank told Reuters. "They have reduced their guidance from 5-9% to 5% for systems and that is probably what is going to influence (the shares) most today."