Leif, FYI.....
Ericsson Shares Drop 3.5% Amid Profit-Warning Rumor >ERICY
STOCKHOLM (Dow Jones)--Telecommunications company Telefon AB LM Ericsson
(ERICY) shares were one of the biggest percentage fallers in the Swedish equity market Wednesday amid talk that a profit warning is on the way.
"There have been rumors that a profits warning is about to be issued, but I have just spoken to Ericsson and they denied it," said one telecoms analyst who declined to be named.
He added that many investors were also troubled by the European telecoms sector in general and how the world's major telecoms companies will perform amid the weakness in Asian and Latin American markets.
"I think sentiment has a lot to do with this today," the analyst said, referring to the drop in Ericsson's shares.
"I think the weakness is unjustified, particularly as a lot of these problems were seen in the second quarter results," he said.
At 1317 GMT, shares in Ericsson were down SEK6, or 3.5%, at SEK164. The shares touched SEK159 earlier in the session.
The retreat came at a time when the Stockholm Stock Exchange general index was at 2977.06 points, up 3.95 points, or 0.1%.
The head of investor relations at Ericsson said the company never comments rumors, and didn't wish to make an exception Wednesday.
"When we have something to communicate to the market we will do so with allpossible clarity," Karin Almqvist Liwendahl said.
Investors sold Ericsson shares on July 27 when the company's
better-than-expected first half pretax profit of SEK7.57 billion was
overshadowed by stagnant mobile-phone sales. On that day the sales concerns drove Ericsson shares down 13% to SEK224.5.
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