Ericsson (NASDAQ:ERIC) Posts Earnings Results, Meets Estimates

Ericsson (NASDAQ:ERIC) issued its earnings results on Friday. The communications equipment provider reported $0.13 EPS for the quarter, meeting analysts’ consensus estimates of $0.13, Zacks reports. Ericsson had a net margin of 12.11% and a return on equity of 23.71%. The business had revenue of $5.22 billion for the quarter, compared to the consensus estimate of $5.74 billion. During the same quarter last year, the firm posted $1.24 EPS. The business’s revenue for the quarter was down 10.4% compared to the same quarter last year.

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

• Reported sales fell 10% due to a strong Swedish krona, while organic sales grew 6%; currency moves reduced EBITA by about SEK 2.2 billion, a clear near-term headwind to reported results.
• Operational performance was strong — group adjusted gross margin ~48.1%, Networks margin ~50.4%, EBITA SEK 5.6 billion — and net cash rose to SEK 68.1 billion with free cash flow of SEK 5.9 billionSEK 15 billion buyback starting next week.
• The Enterprise segment reported a SEK 1.4 billion loss (including one‑time costs and the divestment of iconectiv), and management says an improvement plan is in place but losses will gradually shrink through the year.
• Management warned of rising memory/semiconductor and input-cost pressures that are expected to be a headwind (largely into H2), but said they are mitigating via pricing, product substitution, efficiency and diversified supply‑chain actions.
• Geographic and portfolio diversification is working — North America was down mid-single digits while India and Japan grew strongly — and Ericsson is pushing into new addressable markets (enterprise, mission‑critical/defense, 5G sensing) as a medium‑term growth driver.

Ericsson Price Performance

Shares of ERIC stock opened at $11.37 on Friday. The firm has a market cap of $38.33 billion, a P/E ratio of 14.39, a P/E/G ratio of 1.95 and a beta of 0.91. The company has a debt-to-equity ratio of 0.26, a current ratio of 1.29 and a quick ratio of 1.08. Ericsson has a 1-year low of $7.16 and a 1-year high of $12.19. The firm has a fifty day moving average of $11.43 and a two-hundred day moving average of $10.27.

Ericsson Dividend Announcement

The business also recently disclosed a dividend, which was paid on Thursday, April 2nd. Shareholders of record on Thursday, April 2nd were issued a dividend of $0.1663 per share. The ex-dividend date of this dividend was Thursday, April 2nd. Ericsson’s dividend payout ratio (DPR) is currently 27.85%.

Analysts Set New Price Targets

A number of equities analysts have recently commented on the stock. Weiss Ratings reissued a “buy (b-)” rating on shares of Ericsson in a research note on Monday, December 29th. Morgan Stanley assumed coverage on shares of Ericsson in a research note on Monday, February 9th. They issued an “equal weight” rating and a $11.00 target price on the stock. Argus raised shares of Ericsson to a “hold” rating in a research note on Monday, January 26th. Citigroup reissued a “neutral” rating on shares of Ericsson in a research note on Friday, January 16th. Finally, Wall Street Zen downgraded shares of Ericsson from a “strong-buy” rating to a “buy” rating in a research note on Saturday, April 11th. One investment analyst has rated the stock with a Buy rating, six have assigned a Hold rating and two have issued a Sell rating to the company’s stock. According to MarketBeat.com, the company currently has an average rating of “Reduce” and an average price target of $11.00.

More Ericsson News

Here are the key news stories impacting Ericsson this week:

• Positive Sentiment: Board approved a SEK 15 billion (~$1.6bn) share buyback to start as early as April 23, aiming to optimize capital structure and return surplus liquidity — a near-term shareholder-support action. Ericsson initiates share buyback program
• Positive Sentiment: Adjusted Q1 EPS modestly beat consensus (reported ≈ $0.13 vs. ~$0.12 expected), which provides some earnings support despite other headwinds. MarketBeat Q1 results
• Neutral Sentiment: Company highlighted 6% organic sales growth led by Networks and announced AI‑native radio products (product/strategy positives), but these were partially masked by FX impacts — longer-term upside depends on execution and cost trends. Ericsson Q1 results PR
• Neutral Sentiment: Analyst/commentary pieces (Zacks, Seeking Alpha) note momentum and long‑term growth potential — useful for investors focused on strategy and valuation after the pullback but not immediate catalysts. Zacks Momentum Coverage
• Negative Sentiment: Revenue missed expectations (reported ~ $5.2–5.4bn vs. higher street estimates) and was down year‑over‑year, which drove the immediate negative reaction—sales weakness in North America was specifically called out. Reuters: revenue miss/NA slowdown
• Negative Sentiment: Management warned of rising input costs—especially semiconductors driven by AI demand—and restructuring charges hit reported profits; these margin pressures are cited as a persistent headwind for near‑term profitability. Benzinga: CPU/chip cost headwinds
• Negative Sentiment: Market reaction has been negative despite the buyback — ADRs slid and trading volume spiked as investors focused on the revenue miss and cost risks rather than the repurchase. QuiverQuant: ADR slide analysis

Institutional Inflows and Outflows

Hedge funds have recently added to or reduced their stakes in the stock. Brown Brothers Harriman & Co. acquired a new position in Ericsson during the 3rd quarter worth $28,000. Dynamic Technology Lab Private Ltd acquired a new position in Ericsson during the 1st quarter valued at about $126,000. Dorsey & Whitney Trust CO LLC boosted its stake in Ericsson by 7.2% during the 4th quarter. Dorsey & Whitney Trust CO LLC now owns 42,902 shares of the communications equipment provider’s stock valued at $414,000 after purchasing an additional 2,869 shares during the period. Neuberger Berman Group LLC boosted its stake in Ericsson by 33.9% during the 4th quarter. Neuberger Berman Group LLC now owns 43,232 shares of the communications equipment provider’s stock valued at $417,000 after purchasing an additional 10,955 shares during the period. Finally, Brooklyn Investment Group boosted its stake in Ericsson by 302.7% during the 3rd quarter. Brooklyn Investment Group now owns 46,112 shares of the communications equipment provider’s stock valued at $381,000 after purchasing an additional 34,660 shares during the period. 7.99% of the stock is owned by institutional investors and hedge funds.

About Ericsson

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.