Ericsson shrugs off Motorola crash
By Henrik Persson
STOCKHOLM, Sept 12 (Reuter) - Swedish telecommunications concern L.M. Ericsson (LMEB.ST) shrugged off a sharp
fall in rival Motorola's share price over night, falling just over one percent at the open in Stockholm.
By 0830 GMT, 30 minutes after the open, Ericsson was trading at 327 crowns, down 3.5 crowns on Thursday's Stockholm
close. The Ericsson ADR had fallen in New York to the equivalent of 322 crowns.
Finnish Nokia (NOKSA.HE), which also competes closely with Motoroal and Ericsson, was down seven markka to 434 at
0830 GMT but was off am opening low of 11.00 markka.
Stockholm traders said they agreed with Ericsson's view that Motorola's problems which prompted a profit warning were
specific to that company, especially concerning weakness in the pager market.
``The fall in New York was a lot and the heat went out of the whole market so the fall in Ericsson won't be that dranatic,'' said
one chief broker.
An Ericsson analyst said Motorola's problems were specific and did not mean anything for Ericsson. ``I think the mist will clear
after Motorola's telephone conference due at 2.30 p.m. (1230 GMT),'' he said.
``No-one in Europe is going to sell their Ericsson or Nokia (NOKSA.HE) shares because Motorola's paging business is going
badly. Obviously it cools sentiment but there are no links between the operations. No-one is going their estimate for Ericsson
by one cent because of this,'' another analyst said.
Motorola stunned Wall Street by saying third-quarter profits will be below analysts' expectations due to weakness in two big
pager markets and its decision to stop making Macintosh clones.
The maker of computer chips, cellular phones and other products said the pager market in China was weaker than normal and
the domestic market continues to struggle with inventory problems. Both of these factors could continue into the fourth quarter,
the company said.
Motorola also said the third-quarter results would reflect higher costs associated with a satellite project and other businesses.
It said it would take a charge of $95 million to discontinue its Macintosh clone business.
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