Ericsson shares plunge as gloomy outlook continues

Shares in Ericsson fell to the lowest level since 2004, after the Swedish telecommunications company said its fourth-quarter revenue will be at the low end of an already somber forecast, an Associated Press report said.

The Associated Press report quoted Ericsson CEO Carl-Henrik Svanberg as syaing that tightening markets in Europe and the US, as well as political unrest in emerging markets such as Pakistan, were hurting sales for the wireless equipment maker.

For 2008, Ericsson said it expected current market conditions to prevail, and its longer-term market outlook is unchanged.

The comments added to shareholder concerns, which were heightened in October when the company issued a surprise profit warning, the Associated Press report said.

On Wednesday, Ericsson's shares traded down 8.25% to close at 14.68 kronor ($2.32) in Stockholm. The share price has dropped more than 40% since the start of 2007.

CFO Karl-Henrik Sundstrom stepped down after the profit warning was issued in October. On Tuesday, Ericsson's new CFO, Hans Vestberg, shared the stage with Svanberg at the investor meeting in New York.

The report further said Ericsson chairman Michael Treschow dismissed speculation in a Swedish financial daily that Svanberg had been fired, saying he had 'the full support of the board.'