Ericsson profit tanks, drives technology sector lower

LONDON (ShareCast) - Shares of Ericsson (Stockholm: ERIC-B.ST - news) dropped 14% on the Stockholm Stock Exchange after the Swedish telecom-equipment maker announced that fourth quarter atttributed earnings dropped 65% to 1.49bn Swedish kronor ($221m), after accounting for 700m kronor in restructuring charges. "All the major numbers were disappointing," said Jyske Bank (Copenhagen: JYSK.CO - news) analyst Robert Jakobsen to Bloomberg. As a result of the disappointing results, the technological sector was the most bearish on the Stoxx600 in morning trade on Wednesday. Lower spending from North American customers was a major factor behind the poor results. In fact, sales barely rose 1% to 63.67bn kronor while the gross margin fell to 30.2% from 36.6%. The market was expecting a gross margin of 34.7%. Ericsson Chief Executive Oficer Hans Vestberg indicated that the company saw weaker development in networks and that slower operator spending affected sales. Vestberg explained that those operators also increased cautiousness owing to economic development and political unrest in some countries. M.G.