Stockholm, Feb 2: Ericsson, the world's largest supplier of equipment for mobile phone networks, re

Stockholm, Feb 2: Ericsson, the world's largest supplier of equipment for mobile phone networks, reported fourth quarter earnings below expectations on Friday and reduced its 2007 market growth forecast.

The Swedish group reported a pretax profit of 12.2 billion Swedish crowns ($1.76 billion) compared with the average forecast in a Reuters poll of 32 analysts of 12.51 billion crowns and 10.1 billion in the same period of 2005.

The pretax profit was in the range of forecasts of 11.2 billion to 14.2 billion crowns.

The group said it now forecast growth in the markets for systems for the key GSM/WCDMA mobile phone technologies to be in the mid-single digits.

This compared with its earlier forecast of moderate growth, which the company has said means 5 to 9 percent growth.

The group reported a gross margin of 41.8 percent versus 42.6 percent in the Reuters poll and an operating margin of 22.7 percent compared with a forecast 23 percent.

The lowering in guidance for 2007 was more in line with the expectation of sector analysts of a tough year ahead.

''They are guiding down from 5 to 9 percent for the systems market and this is probably what will have the most impact during the day,'' said Swedbank analyst Jan Ihrfelt.

REUTERS