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Ericsson profits crash

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Ericsson profits crash
07:43 CEST+02:00
Telecoms company Ericsson's report for the second quarter was below market expectations. Profits crashed to 2.9 billion kronor ($488.34 million) from 9.3 billion kronor in the corresponding period of 2007.

Analysts had forecast profits of 3.9 billion kronor, according to a table compiled by Reuters.

Turnover amounted to 48.5 billion kronor, compared to 47.6 billion in the second quarter 2007. Analyst expectations were 48.1 billion kronor.

Ericsson retained its forecast that the market for mobile infrastructure would not show growth in 2008. The market for professional services is however expected to show strong growth.

Ericsson's result for the second quarter is weighed down by re-structuring costs of 1.8 billion kronor for the ongoing program of savings.

Gross margins amounted to 37 percent during the quarter, in comparison with 43 percent in the corresponding period of 2007.

Operative cash flow amounted to 8.5 billion kronor, compared to 4.2 billion kronor in the second quarter 2007.

CEO Carl-Henric Svanberg wrote in the report that business activity has shown stable development and that the company has not noted any significant changes to the market. The weak US$ has continued to negatively affect Ericcson's revenue and margins.

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