Ericsson Still Looks Safe and Sound, Despite Investor Overreaction - Barron's

| About: LM Ericsson (ERIC)

Excerpt from Barron's Weekly Magazine. Receive all our excerpts by signing up here:

Ericsson's Undue Pounding by Matthew Curtin and Arindam Nag

Summary: After LM Ericsson reported 14% earning gains for Q4 and lowered estimates for 2007, investors rushed to sell Friday. Yet Ericsson still looks like the way to go for those interested in the growing demand worldwide for mobile and broadband. Although the telecom equipment sector suffers from fierce price competition, the company is better positioned than others. Two recent acquisitions are progressing smoothly, while competitors are still trying to put together consolidation deals. Despite a drop in profit margins due to a necessary expansion of services, Ericsson's margins still rise above its peers. The company is also gaining in its share of the wireless market, and has positioned itself well at the high, music-playing end of handsets.
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ERIC chart