Ericsson hurt by profit warning

Ericsson makes mobile network equipment

Shares in Ericsson have tumbled more than 25% after the Swedish firm issued a shock profit warning.
The world's biggest mobile network maker said third-quarter sales, operating income and cash flow would fall way short of expectations.

The news sent its shares to a three-and-a-half-year low.

Ericsson blamed the drop on lower-than-hoped for sales in network upgrades and expansions which resulted in an unfavourable business mix.

"The effect of market dynamics is always a matter of judgement. This quarter we have underestimated the effects," Chief Executive Carl-Henric Svanberg said.