Ericsson (NASDAQ:ERIC) Earnings Limited Even with Sales Growth

While Ericsson (NASDAQ:ERIC) sales are expected to surge in 2011, the emerging markets that growth will occur in will have limited earnings potential because of lower margins.

Canaccord says, "We believe Ericsson is well positioned for solid 2011 sales, as our carrier capex survey indicated solid wireless trends in 2011 driven by new 4G network builds in North America and 3G builds in developing markets such as India. However, due to our expectations for the mix in global wireless sales shifting to lower-margin developing markets, we anticipate limited earnings growth in 2011 for Ericsson.

"ERIC reports Q4/10 results on Jan. 25 (pre-market), and we remain comfortable with our Krona 60.3 revenue (in line with consensus) and $0.28 pro forma EPS (above consensus) estimates."

Canaccord Genuity maintains a "Hold" rating on Ericsson (ERIC), which was trading at $11.69, down $0.10, or 0.85 percent, as of 2:56 PM EST. Canaccord has a price target of $11 on Ericsson.