The crisis at Ericsson deepens as the world's biggest maker of mobile network equipment reports a 94 percent plunge in quarterly operating profit and tumbling sales at its core networks division. Hayley Platt reports
A fall was no surprise but the scale of it was. Ericsson's quarterly operating profit down 94 percent, sending shares at least 16 percent lower. The Swedish firm is still the world's biggest maker of mobile network equipment. But sales at its core networks division aren't what they were. And its latest results missed analysts' forecasts for a fifth straight quarter. SOUNDBITE (English) IG SENIOR ANALYST, CHRIS BEAUCHAMP, SAYING: "We assume that the sector was relatively free of problems but it's clear from what we've had from Samsung and Ericsson over the last couple of weeks that actually no there are plenty of issues. And that I think means that maybe investors will continue to be concerned about the outlook for tech stocks over the next few months." The problem - weak demand from customers in Brazil, Russia and the Middle East. And lower sales in Europe after mobile broadband projects were ended last year. Finland's Nokia and China's Huawei aren't helping. SOUNDBITE (English) IG SENIOR ANALYST, CHRIS BEAUCHAMP, SAYING: "I think partially it is too much competition and you're finding that the margins are being hit, people are having to find new ways of competing. Overall though it's a company that hasn't innovated to the same degree as many of its competitors." Ericsson is now cutting thousands of jobs. Something many analysts say they should have done much sooner.