Update: Ericsson Warns That Its Handset Division Will Lose Money
Updated from 11:05 a.m. EDT
Shares in Swedish mobile phone company
Ericsson
(ERICY)
TheStreet Recommends
sank 11% Friday after the company spooked investors when it said its handset division would lose money this year.
Shares finished Friday regular trading down 2 3/4, or 12%, at 19 13/16.
While the company made the announcement as it reported a mostly stellar earnings report, investors clearly keyed on the negative news. While its income before taxes rose 325% for the quarter, to 12.6 billion kroners, its consumer products division did post a loss of 1.8 billion kroners.
According to a company statement, the loss is attributed to "a component shortage from a key supplier and an unfavorable product mix." The company added that to restore profitability it is undergoing a strategic review.
