Ericsson Shares Skid 8% As Enterprise Trouble Offsets AT&T Boost
Ericsson shares slumped 8% Friday as the telecom equipment maker missed on fourth-quarter profit due to its struggling enterprise division.
Ericsson said its fourth-quarter profit rose 43% to 4.9 billion Swedish krona ($450 million), or 1.44 SEK per share, as sales edged up 1% to 72.9 billion krona. The earnings missed the Visible Alpha-compiled consensus of SEK2.41 a share, though revenue was basically in line versus the 72.6 billion krona estimate.
The company saw a big boost from winning a key AT&T $(T)$ contract, as sales in North America jumped by 54%. But there was double-digit sales declines in Southeast Asia, Northeast Asia and the Middle East and Africa.
Analysts said Ericsson's enterprise division was the weak spot, and the company said its priority there is to stabilize the commercial performance. Ericsson so far has written down about $4 billion of the $6.2 billion acquisition price of Vonage.
Ericsson shares (SE:ERIC.B) $(ERIC)$ fell as much as 10% in Stockholm trade. Its rival Nokia (FI:NOKIA) $(NOK)$ declined 2% in Helsinki trade.
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