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February 12, 1997updated 04 Sep 2016 12:48am

SOARING ERICSSON’S NUMBERS COME IN ON THE BUTTON

By CBR Staff Writer

Despite reporting figures that show it to have stormed past most of the competition to become one of the dominant players in the industry, with over $16bn in annual sales, and a healthy level of profits, L M Ericsson Telefon AB saw its shares slump four krone at 248 krone after it announced the figures. People were long in the share before the report so there is no real upside, a Stockholm trader commented to Reuter. But there was nothing negative in the report and the share price could swing several times later today. The stronger krone cost the company $121.7m compared with last year. Mainly the stronger earnings capacity, the faster inventory revenue and large customer payments at year end contributed to the company’s strong cash flow. Cash flow was a positive $546m compared with a negative $348m last year, and the company says this should be sufficient for its investment program needs. As a result of the action programs and rationalization measures that we have implemented, Ericsson can now show a strongly improved positive cash flow despite the sharp growth in operations, managing director Lars Ramqvist said. Gross margins have weakened as a result of increased competition, currency effects and increased risks which have been taken into account in the report concerning changes in technology and markets, Ericsson said. It sees signs of similar price pressures on all products this year as last.

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