Ericsson (NASDAQ:ERIC) Issues Earnings Results, Meets Expectations

Ericsson (NASDAQ:ERIC) posted its quarterly earnings data on Tuesday. The communications equipment provider reported $0.13 EPS for the quarter, hitting analysts’ consensus estimates of $0.13, Zacks reports. The firm had revenue of $5.43 billion for the quarter, compared to analyst estimates of $5.66 billion. Ericsson had a return on equity of 20.67% and a net margin of 10.72%.

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 0.7%

Shares of Ericsson stock opened at $10.07 on Thursday. The firm’s 50 day moving average is $12.02 and its 200 day moving average is $11.34. The firm has a market capitalization of $33.95 billion, a PE ratio of 12.91, a price-to-earnings-growth ratio of 1.79 and a beta of 0.93. Ericsson has a 1 year low of $7.16 and a 1 year high of $13.77. The company has a current ratio of 1.12, a quick ratio of 0.93 and a debt-to-equity ratio of 0.21.

Institutional Investors Weigh In On Ericsson

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

Analyst Upgrades and Downgrades

Several analysts have recently issued reports on the company. Citigroup reissued a “neutral” rating on shares of Ericsson in a report on Wednesday. Weiss Ratings reaffirmed a “buy (b)” rating on shares of Ericsson in a research report on Tuesday, June 2nd. Danske upgraded shares of Ericsson from a “hold” rating to a “buy” rating in a research note on Wednesday. Finally, Wall Street Zen lowered shares of Ericsson from a “buy” rating to a “hold” rating in a report on Saturday, April 25th. Two analysts have rated the stock with a Buy rating, five have given a Hold rating and two have assigned a Sell rating to the company. According to MarketBeat, the stock presently has a consensus rating of “Hold” and a consensus target price of $11.00.

Key Headlines Impacting Ericsson

Here are the key news stories impacting Ericsson this week:

• Negative Sentiment: Ericsson’s Q2 2026 results fell short on revenue, and the company warned that higher component costs could weigh on profitability into future quarters. Ericsson Says AI Boom Is Driving up Component Costs, Will Hit Results in Coming Quarters
• Negative Sentiment: Several reports highlighted weaker sales, especially in North America and the Networks segment, along with a cautious outlook for third-quarter network margins. Ericsson Stock Drops On Weak Q2, Cautious View On Q3 Networks Margin
• Neutral Sentiment: Ericsson said AI-related use cases and “physical AI” could become a longer-term growth driver, offering some offset to near-term margin pressure. Ericsson CEO: Expect AI to be an upside driver for mobile networks
• Neutral Sentiment: The company also announced efforts to raise telecom equipment prices to help offset rising input costs, which may support margins but could affect demand. Ericsson raises telecom equipment prices amid component costs and AI
• Negative Sentiment: Legal attention is also building after a new investor investigation notice tied to the post-earnings stock drop and alleged losses from the Q2 miss. Ericsson Investigation Notice: SueWallSt Notifies Investors of Pending Investigation Into Ericsson (ERIC)

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.