Margins Hit Ericsson

The stock slides after the company posts a mostly strong profit report.
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Ericsson

(ERICY)

slipped 8% early Thursday after the wireless equipment company posted a fourth-quarter profit.

For the quarter ended Dec. 31, the Stockholm-based company earned 6 billion kronor ($847 million), or 0.38 kronor a share. That's up from the year-ago 142 million kronor, or 0.01 kronor a share. Sales rose 9% from a year ago to $5.5 billion.

"We have experienced the strongest growth in mobile users ever," said CEO Carl-Henric Svanberg. "This is exciting for a company with a vision of an all-communicating world."

But investors worried about some of the details in that rosy picture.

"Gross margins were slightly weak and the dividend was a tad below what we hoped for," Claes Ahrel, an equity strategist at Laensfoersaekringar in Sweden, told

The Associated Press

.

Early Thursday, Ericsson dropped $2.40 to $28.99.