Ericsson Issues Surprise Profit Warning

Swedish technology giant Ericsson has today announced a suprise profit warning in the wake of its third quarter forecast results, which are predicted to be much lower than previous period figures as a result of weak sales and cash flow problems throughout the year.

The announcement today saw share values in the technology group fall by over a quarter, to their lowest point in almost four years as the company defied all previous expectations in announcing the shock warning of dangerously low profits over the third quarter.

Spokesmen from the company have suggested that slowing sales in its substantial mobile handset division and slower progress in its network expansion were responsible for the pending surprise results, creating a less profitable ‘business mix’ over the last three months.

Interim reports suggest that the figures could show a 36% drop as far as profits are concerned from just over a year ago, well below what analysts had previously forecast as a result of sluggish business progress over the last few months.

The news is likely to raise questions about the management of Ericsson at present, and there is a likelihood that certain high profile executives may end up in trouble over the significant downturn seen over the last three months.

The company is expected to release its figures to the market imminently, although according to the reports today that news will spell yet more sell off in its securities as a reflection of the wider slowdown across the organisation.

Shares in other mobile phone handset manufacturers were also down today as a result of the news, for fear that this could potentially indicate underlying problems within the market as a whole. Among some of the notable losers were Finish manufacturer Nokia, and international network operator Vodafone.

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