Ericsson shares plunge over third-quarter warning

Shares in Ericsson lost more than a sixth of their value Wednesday after the troubled Swedish telecoms giant pointed to "significantly lower" third-quarter results.

Ericsson shares, which have lost more than half their value in the last 18 months, plunged more than 17.5 percent shortly after trading opened.

The corporation is in the midst of a major overhaul, and earlier this month announced it was cutting 3,000 jobs in Sweden.

The company fired chief executive Hans Vestberg in July after seven years in the post.

During his tenure, it struggled against competition from rivals Nokia, Siemens and Alcatel-Lucent and failed to make inroads in saturated and competitive markets such as Europe and North America.

Sales sunk 14 percent between July and September compared to the same period a year earlier, to 51.1 billion kronor (5.2 billion euros, $5.8 billion), Ericsson said in a statement Wednesday.

Operating income is expected to be 300 million kronor for the third quarter compared to 5.1 billion in the third quarter of 2015, it said, citing poor demand in Russia and other developing markets.

"The sales decline was mainly driven by markets with weak macro-economic environment such as Brazil, Russia and the Middle East, impacting both coverage and capacity sales in those markets.

"In addition, capacity sales in Europe were lower following completion of mobile broadband projects in 2015," it said.

Jan Frykhammar, president and CEO, said the results were "significantly lower" than expected and that "current trends are expected to continue short-term".

Final results are expected on October 21.