Ericsson (NASDAQ:ERIC) Announces Quarterly Earnings Results

Ericsson (NASDAQ:ERIC) issued its quarterly earnings results on Tuesday. The communications equipment provider reported $0.13 earnings per share for the quarter, hitting analysts’ consensus estimates of $0.13, Zacks reports. Ericsson had a return on equity of 22.17% and a net margin of 10.80%.The company had revenue of $5.43 billion for the quarter, compared to analyst estimates of $5.66 billion.

Here are the key takeaways from Ericsson’s conference call:

• Ericsson said Q2 execution was solid, with gross margin of 48% and EBITDA margin of 13.1%, highlighting continued disciplined cost control and operational resilience.
• Organic sales declined 1% year over year, but management said underlying growth was roughly flat excluding last year’s one-off IPR settlement. Reported sales were also pressured by currency headwinds.
• The company’s IPR revenue run rate is about SEK 13.5 billion, including new agreements signed in July 2026. Ericsson said these deals strengthen the value of its patent portfolio going forward.
• Ericsson warned that component cost inflation tied to the AI boom is rising and will gradually weigh on results in coming quarters. The company is responding with pricing actions, product redesigns, substitutions, and supply-chain measures.
• Management said the company is positioned to benefit from AI-driven growth in mobile connectivity, especially uplink-intensive and low-latency applications. It also sees opportunity in enterprise connectivity, APIs, mission-critical networks, and defense-related use cases.

Ericsson Trading Down 13.7%

NASDAQ:ERIC opened at $10.11 on Wednesday. Ericsson has a one year low of $7.16 and a one year high of $13.77. The business’s 50-day simple moving average is $12.06 and its 200 day simple moving average is $11.33. The company has a debt-to-equity ratio of 0.21, a quick ratio of 0.93 and a current ratio of 1.12. The stock has a market cap of $34.08 billion, a price-to-earnings ratio of 12.80, a price-to-earnings-growth ratio of 2.05 and a beta of 0.93.

Ericsson News Roundup

Here are the key news stories impacting Ericsson this week:

• Negative Sentiment: Ericsson’s Q2 results showed EPS of $0.13, in line with estimates, but revenue came in below expectations at $5.43 billion, reinforcing concerns about slower demand. Ericsson Earnings Release
• Negative Sentiment: The company warned that higher component costs, including memory-chip inflation, are pressuring margins and could hurt profitability in coming quarters, especially in Networks. MarketWatch Memory-Chip Price Spike Story
• Negative Sentiment: Management gave a cautious Q3 outlook, including pressure on Networks adjusted gross margin, which suggests near-term earnings could remain under strain. RTTNews Q3 Margin Outlook
• Neutral Sentiment: Ericsson continues to highlight AI-related network use cases and “physical AI” as a future upside driver, but investors are treating that as a longer-term offset rather than an immediate catalyst. CEO AI Upside Driver Story
• Neutral Sentiment: The company is also raising telecom equipment prices to offset cost pressure, which could help margins later but may weigh on customer demand in the near term. NewsBytes Price Increase Story

Analyst Upgrades and Downgrades

Several research analysts have recently weighed in on the stock. Danske upgraded shares of Ericsson from a “hold” rating to a “buy” rating in a report on Wednesday. Citigroup reaffirmed a “neutral” rating on shares of Ericsson in a research report on Tuesday, April 28th. Wall Street Zen downgraded Ericsson from a “buy” rating to a “hold” rating in a report on Saturday, April 25th. Finally, Weiss Ratings restated a “buy (b)” rating on shares of Ericsson in a report on Tuesday, June 2nd. Two investment analysts have rated the stock with a Buy rating, five have assigned a Hold rating and two have issued a Sell rating to the company’s stock. According to data from MarketBeat.com, the company has an average rating of “Hold” and an average price target of $11.00.

Institutional Investors Weigh In On Ericsson

Hedge funds and other institutional investors have recently modified their holdings of the stock. Geode Capital Management LLC increased its holdings in shares of Ericsson by 2.7% in the 4th quarter. Geode Capital Management LLC now owns 257,021 shares of the communications equipment provider’s stock valued at $2,480,000 after acquiring an additional 6,667 shares during the last quarter. Marshall Wace LLP boosted its stake in Ericsson by 234.2% during the 3rd quarter. Marshall Wace LLP now owns 1,078,145 shares of the communications equipment provider’s stock valued at $8,916,000 after purchasing an additional 755,587 shares during the period. Van ECK Associates Corp increased its position in Ericsson by 434.3% in the 3rd quarter. Van ECK Associates Corp now owns 380,372 shares of the communications equipment provider’s stock valued at $3,146,000 after acquiring an additional 309,183 shares during the period. Lazard Asset Management LLC boosted its position in Ericsson by 197.2% during the 2nd quarter. Lazard Asset Management LLC now owns 1,242,381 shares of the communications equipment provider’s stock worth $10,534,000 after acquiring an additional 824,287 shares during the period. Finally, AQR Capital Management LLC increased its holdings in shares of Ericsson by 7.5% during the first quarter. AQR Capital Management LLC now owns 134,891 shares of the communications equipment provider’s stock valued at $1,049,000 after purchasing an additional 9,362 shares during the period. Institutional investors own 7.99% of the company’s stock.

Ericsson Company Profile

Ericsson AB is a Swedish multinational telecommunications equipment and services company headquartered in Stockholm. Founded in 1876 by Lars Magnus Ericsson, the company designs, develops and sells infrastructure, software and services that enable mobile and fixed-line networks worldwide. Ericsson serves a global customer base that includes mobile network operators, enterprise customers and public-sector organizations across Europe, the Americas, Asia-Pacific, the Middle East and Africa.

The company’s core activities center on building and modernizing network infrastructure, with a particular focus on radio access networks (RAN), core network software, cloud-native solutions and network management systems.