Swedish telecoms equipment maker Ericsson has issued a profit warning for its third quarter results. Its shares plummeted by 30% after the announcement.
It issued preliminary figures showing that operating profits were 5.6 billion Swedish crowns, well below the 8.9 billion analysts had expected.
Ericsson blamed the fall on a shortfall in mobile network upgrades, which affected its margins. Sales rose 6% to 43.5 billion crowns, again below analysts' expectations.
The company said its networks business was developing most rapidly in areas where competition for new network contracts was intense.
So far, the lower margins in these areas had been offset by higher-margin network expansions and upgrades, but these had recently dried up.
