Ahead of the Bell: Analysts disagree on LM Ericsson's future
NEW YORK—Analysts on Monday disagreed about the health of wireless equipment maker LM Ericsson Telephone Co.'s first-quarter report.
On Friday, Ericsson said its profit fell 55 percent due to higher acquisition costs and smaller profits from Sony Ericsson, its mobile phone joint venture. But Wall Street had expected a smaller profit, and shares jumped 13.5 percent, to $24.63 Friday.
Goldman Sachs analyst Tim Boddy upgraded the stock to "Neutral" from "Sell," saying profit margins will improve, and Ericsson will take larger market share.
However, Banc of America Securities analyst Tim Long downgraded the stock to "Neutral" from "Buy." He said the quarterly results were good, but Ericsson will face difficult competition in the wireless infrastructure market, and Sony Ericsson's products were weak in the first quarter.
