Ericsson Profit Declines as Customers Slash Spending

Ericsson AB, the world’s largest maker of wireless networks, reported a 92 percent drop in fourth-quarter profit, falling short of analysts’ expectations, as phone companies reduced spending.

Net income slumped to 314 million kronor ($43.4 million) from 3.89 billion kronor a year earlier, Stockholm-based Ericsson said today in a statement. Analysts had anticipated profit of 2.5 billion kronor, the average of 17 estimates compiled by Bloomberg. Revenue slipped 13 percent to 58.3 billion kronor.

“It’s going to be challenging to both maintain market share and secure healthy financial development, with Chinese equipment manufacturers being so aggressive and the latest contracts likely having been signed on cut-throat margins,” said Fredrik Thoresen, an Oslo-based analyst with DnB NOR Markets, who has a “sell” rating on Ericsson.

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- Posted: 2010-01-25 11:20:34

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