Ericsson sued on results statements after shares fall

STOCKHOLM, Oct 30 (Reuters) - A law firm in the United States late on Monday said it was suing Swedish telecom equipment giant Ericsson (ERICb.ST) in a class action suit claiming the firm issued misleading statements over its results.

Earlier this month Ericsson reported a third-quarter result well below analysts' expectations, sending its stock down more than 23 percent on the day. At an investor presentation in early September, Ericsson had been upbeat about its prospects.

Law firm Coughlin Stoia Geller Rudman & Robbins LLP said in a complaint filed at a U.S. District Court in New York that between Sept. 11 and Oct. 15, 2007 Ericsson issued "materially false and misleading statements regarding the Company's business and financial results."

The law firm said in a statement posted on its website that Ericsson "knew or recklessly disregarded" the fact that it was experiencing declining sales in its networks due to lower sales of expansions and upgrades of mobile networks.

The law firm also said Ericsson knew sales in Western Europe were declining due to operator consolidation in several markets and that, as a result, it lacked a reasonable basis for its positive statements about its business situation.

"It is regrettable that we have been sued," said Ericsson spokeswoman Gilla Grip.

"We have to get hold of the suit before we can say anything more. But we have followed all the stock market rules."

On Oct. 16 -- about 10 days before it was scheduled to release results -- Ericsson reported operating profit of 5.6 billion Swedish crowns ($878.2 million) against analysts' expectations of a profit of 8.9 billion crowns.

Shares in the firm dropped 30 percent at one point during the day -- their biggest ever intraday drop.

The U.S. law firm said it was seeking damages for all investors who bought Ericsson shares between Sept. 11, 2007 -- when Ericsson held its presentation in London -- and Oct 15, 2007.

Ericsson's management has said a chief reason for the surprisingly weak results was due to softer-than-expected sales in September as the bulk of quarterly business comes in the third month of each quarter.