Telecoms equipment giant Ericsson reported a dip in its third quarter gross margin, causing its shares to trade down for most the day even though its earnings were largely in line with expectations.
Ericsson said it expected moderate growth in its mobile equipment market in 2006, buoyed by rising numbers of mobile phone users in emerging markets and the switch to high-speed 3G services such as music and video in developed countries.
Analysts focused on the gross margin dip and the company blamed it on the increased cost of building up its services business, managing operators' networks.
"The market continues to show good development with growth in mobile voice and data, broadband and in emerging markets in general," Ericsson ceo Carl-Henric Svanberg said.
Ericsson forecast moderate 2005 and 2006 market growth, which analysts said meant 5-9 per cent. Pretax profit was Skr8bn Swedish crowns.
Its stock opened down but later pared its losses and then turned 0.38 per cent higher by 1.55pm to Skr26.30 crowns.
The wider Eurotech index, also down for most of the day, had edged up 0.12 per cent by the same time. Ericsson's third quarter gross margin was 45.2 per cent versus a forecast 46.3 per cent and 47.1 per cent in the third quarter of 2004.