Ericsson shares continue to plunge
The Local · 21 Nov 2007, 09:30
Published: 21 Nov 2007 09:30 GMT+01:00
After just a few minutes of trading, Ericsson's share price had fallen back a further 4 percent. This followed an 11 percent drop on Tuesday afternoon after CEO Carl-Henric Svanberg reiterated earlier warnings.
At a meeting with investors in New York, the company said it expects fourth-quarter sales to be at the lower end of its prior outlook, hurt by softness in Europe and the U.S. and political unrest in emerging markets, which account for more than half of the company's sales.
Shares of LM Ericsson AB also emerged as one of Tuesday's biggest decliners on the New York Stock Exchange in the telecommunications sector as the broader market also retreated.
Citi Investment Research analyst Sherief Bakr called the comments "another blow to investor confidence," but reiterated a "Buy" rating on the stock.
"Management's comments regarding 'worrying' near-term market dynamics suggest that margin recovery will likely be pushed into (the second half of 2008," he wrote in a note to clients.