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Ericsson struggles shares recession after bad outlook

After LM Ericsson AB announced that its revenue will be lower than prospected, its shares fell to the lowest level since 2004 on Wednesday.

Speaking at an investor briefing Tuesday in New York, Ericsson Chief Executive Carl-Henrik Svanberg said tightening markets in Europe and the U.S., as well as political unrest in emerging markets such as Pakistan, were hurting the quarter's revenue.

For 2008, Ericsson said it expected current market conditions to prevail, and its longer-term market outlook is unchanged.

The comments added to shareholder concerns, which were heightened in October when the company issued a surprise profit warning.

On Wednesday, Ericsson's shares traded down 4.9 percent at 15.22 kronor (US$2.41, EURO 1.64) in Stockholm. The share price has dropped more than 40 percent since the start of 2007.

The company's previous chief financial officer, Karl-Henrik Sundstrom, stepped down as a result of the profit warning in October. On Tuesday, Ericsson's new CFO, Hans Vestberg, shared the stage with Svanberg at the investor meeting in New York.

Ericsson chairman Michael Treschow on Wednesday dismissed speculation in a Swedish financial daily that Svanberg had been fired, saying he had "the full support of the board."