Ericsson shares plunge on restructuring and disappointing Q1

Ericsson shares plunged after the telecom gear vendor fell short of first-quarter expectations and announced a major restructuring. Ericsson said net profit rose 49 percent year over year to $242.6 million, but revenue fell 2 percent and gross operating profit margin sank from 35.4 percent last year to 33.3 percent during the latest quarter.

Analysts said the shortfall was due in part to weakened demand for an LTE market that is past its peak as well as an increase in sales in lower-margin markets. Ericsson said it will focus primarily on network products and services in an effort to regain its footing. Article

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