Shares in Ericsson plunged more than 10 per cent after it cut forecasts for this year and said it will outsource manufacture of its handsets to Flextronics.
At 11.10 (GMT) Ericsson B was down Swedish krone 12.50 or 10.55 per cent at skr 106.00 bid, while the SX-General was down 155.35 points or 3.03 per cent at 4,842.59.
Ericsson said pretax profit rose 75 per cent to skr 28.692 billion last year on continued strong sales at its network systems business, which grew by 29 per cent over the full year, and by 61 per cent in the fourth quarter.
In the fourth quarter, pretax profit fell to skr 4.593 billion from skr 8.479 billion a year earlier on sales up to skr 82.109 billion from skr 73.755 billion.
Ericsson said it sees total full year sales growth in 2001 of between 15 and 20 per cent and an operating margin in the range of 6 to 8 per cent.
Ericsson said it expects the mobile phone market to reach between 500 and 540 million units and for the number of mobile subscribers to reach 920 to 950 million subscribers, compared with between 700 and 715 million subscribers in 2000.
Ericsson said it is to completely transfer its mobile phone handset production to Flextronics effective from April 1st, in order to provide better economies of scale, higher capital efficiency, and better volume flexibility.
As part of the deal 4,200 Ericsson employees will join Flextronics, while 600 staff in Sweden at Linkoping and Lund are to be made redundant.
AFP
