Ericsson Q1 pretax profit below consensus

STOCKHOLM, Apr 21 (Reuters) Ericsson, the world's largest supplier of mobile phone network equipment, reported a first quarter pretax profit and profit margins which were below expectations on Friday.

The group, which stuck to its forecast of moderate growth this year in the global mobile systems market, reported a pretax profit of 6.7 billion crowns (8 million), below the average of forecasts in a Reuters poll of 7.5 billion crowns.

This came after 6.7 billion in the same quarter of 2005 and 10.4 billion crowns in the fourth quarter of 2005.

Ericsson's first quarter 2006 sales came in at 39.2 billion crowns versus a forecast 38.8 billion crowns and 31.5 billion in the same period a year ago.

Ericsson said it expected some of the cost savings from the integration of the Marconi business to be slightly delayed.

Its Q1 gross margin came to 43.3 percent, below a forecast 43.7 percent, while the operating margin was 16.9 percent, versus a forecast 18.8 percent. Ericsson said the year-on-year margin fall was due to new contracts and the Marconi integration.

REUTERS CS HS1146