STOCKHOLM, Oct 12 (Reuters) - Swedish telecom equipment maker Ericsson warned on Wednesday that its third-quarter profit would be “significantly lower” than expected after a downturn in its mobile broadband business had accelerated.
The company said in a statement that its operating income fell to 0.3 billion crowns ($34.8 million) from 5.1 billion crowns a year ago, including restructuring charges of 1.3 billion crowns, while sales fell 14 percent to 51.1 billion crowns.
The mean forecast of analysts’ expectations stood at an operating income of 4.3 billion crowns and sales of 53.6 billion crowns, Thomson Reuters data showed.
“Our result is significantly lower than (what) we expected, with a particularly weak end of the quarter, and deviates from what we previously have communicated regarding market development,” acting Ericsson CEO Jan Frykhammar said in the statement.
“Continued progress in our cost-reduction programmes did not offset the lower sales and gross margin. More in-depth analysis remains to be done but current trends are expected to continue short-term.”
$1 = 8.6231 Swedish crowns Reporting by Niklas Pollard and Bjorn Rundstrom; Editing by Subhranshu Sahu