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Technology Stocks : Ericsson overlook?
ERIC 9.515-1.2%10:31 AM EST
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To: Tri Vo who wrote ()11/17/1999 9:12:00 AM
From: Terry D  Read Replies (2) of 5390
 
STOCKHOLM (Dow Jones)--Swedish telecoms group LM Ericsson AB (ERICY) Wednesday said achieving double-digit operating margins on mobile handsets in the fourth quarter this year will be "a real challenge," at an analyst meeting in London.
Ericsson's Chief Executive Kurt Hellstroem said that the production of mobile handsets in 1999 will be at the lower end of the planned 32 million to 39 million units range.
The statements largely match those made when it released its nine-month interim report - that production will fall at the "lower end of the plan" and double-digit margins in the fourth quarter will be "still possible, but more of a challenge to "achieve." Ericsson also repeated its earlier forecast of a pretax profit between SEK15 billion and SEK16 billion this year with sales up between 12% and 15%.
In Stockholm the share was down SEK18, or 4.7%, at SEK367 at 1140 GMT, after hitting a low at SEK350. Traders said the market seemed concerned with continuing production problems for the handsets.
At the meeting, Hellstroem said production ramp-up problems with the new mobile phones continued and that they mainly referred to Ericsson's top-end phone the T28. Analysts at the meeting said however that they saw nothing really new coming out and that the drop in the share price was an overreaction.
A Stockholm-based analysts said he expected the share price to recover.
"I see it (the drop) as a buying opportunity," he said.
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