SHARES in the Swedish telecoms company Ericsson plummeted 15 per cent yesterday – to the lowest point since 2008 – on a dismal set of fourth quarter results.
Net income came in at SEK1.5bn, just a third of last year’s 4.4bn Swedish krona (£400m) and shocking analysts who were expecting to see net income nearer the SEK4.2bn mark.
Ericsson put this down to lower sales volumes in networks, particularly across North America where sales declined 20 per cent, and losses related to the Sony Ericsson partnership, in which sales fell 20 per cent.
Ericsson agreed to sell its share in the partnership in October to Sony for €1.05bn. The deal is set to close this year.
Ericsson reported net cash of SEK39.5bn, in a 10 per cent rise on last quarter’s balance, but a 27 per cent drop on the end of 2010.
Ericsson named modernisation as a cause of its decline, due to both a drop in sales as wireless operators concentrate on building fourth generation networks and the money spent on rolling out new Ericsson equipment across Europe.
•Motorola Solutions, the telecoms equipment provider launched when Motorola Inc divided its operations last year, showed better results. Yearly profits jumped to $1.16bn (£740m) from $633m, with the year’s revenue up seven per cent to $8.2bn despite a 37 per cent drop in fourth quarter profits.