(Associated Press via NewsEdge) Ericsson, the world's largest maker of wireless networks, said that fourth-quarter profit rose 13%, boosted by strong sales and its recent integration of British fixed telecom networks company Marconi.
The Stockholm-based company said it expects traffic in the world's mobile networks to continue to grow thanks to new services and subscribers.
But Ericsson modified its outlook for the GSM/WCDMA track saying it expects mid-single digit growth, meaning around 5%, in 2007. The company had previously forecast moderate growth of around 5% to 9%.
Ericsson shares dropped 5.1% to 26 kronor ($3.70) in Stockholm.
Ericsson said net profit in the three-month period ended Dec. 31 rose to 9.8 billion kronor ($1.41 billion) from 8.64 billion kronor ($1.2 billion) a year earlier. For the full year 2006 and excluding one-time costs and gains, Ericsson earned 26.44 billion kronor ($2.92 billion), up from 24.46 billion kronor ($3.5 billion).
Sales for the quarter climbed 18% to 53.68 billion kronor ($7.72 billion) from 45.67 billion kronor ($6.5 billion) a year earlier, which was in line with expectations.
Analysts polled by SME Direkt had forecast fourth-quarter sales of 53.8 billion kronor ($7.75 billion).
Operating margin for the October to December period was unchanged at 22.7%.
But Ericsson's CEO Carl-Henric Svanberg pointed to the company's recent acquisitions, referring to both Marconi and Redback, saying that 'obviously we are consuming cash.'
He added that 'this year may include other acquisitions,' but remained mum on what or where those might include.
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