Last Call: Ericsson shares jump after strong 1Q results

NEW YORK—U.S.-traded shares of LM Ericsson jumped Friday after the Swedish wireless equipment maker posted better-than-expected results for its first quarter, driven by strength in its networks business.

The company's earnings fell 55 percent because of higher costs -- from acquisitions, restructuring charges and research and development expenses. But the results were "better than feared," said RBC analyst Mark Sue, adding, however, that challenges remain for the company.

He rates the stock "Sector Perform." The company, he said, still has to recover its margins and fend off competition.

"Having said that, the outlook seems to be stabilizing and the worst seems to be over from a downward earnings revision point of view," Sue wrote.

Citi Investment Research analyst Sherief Bakr said in a note to European investors the company's operating margin in its networks segment was 9 percent, above analysts' expectations of 6 percent, thanks to a "strong recovery in North America sales."

Ericsson's American Depositary Shares rose $2.75, or 13 percent, to $24.45. The stock has traded in the 52-week range 17.04 and $43.41.