STOCKHOLM, Sweden-Despite a projected decline in sales, L.M. Ericsson said its first-quarter margins will exceed the fourth quarter above 41.6 percent, news that sent its shares up by more than 7 percent.
“The main reason for the improvement is better-than-anticipated benefits of cost of sales reduction activities,” said the company, trumping its earlier claim in February that its margins could drop.
On the strength of this report, Merrill Lynch raised the company’s earnings forecast by 24 percent and anticipates a gross margin of 44.4 percent.
