Ericsson's CEO hinted that there may be higher dividends or share buybacks coming.
Continuing cost-saving efforts boosted profitability and results also benefited from the $1 billion sale of its Iconectiv connectivity services business.
Swedish telecoms gear maker Ericsson reported a rise in quarterly core earnings that beat expectations on Tuesday, as operational improvements drove gross margins to sustainable levels despite a decline in sales.
Ericsson is upgraded to a "Buy" with a price target raised to 100 SEK, citing strong fundamentals and improving prospects. ERIC's transition from hardware to software, wind-down of restructuring charges, and robust cash position support the bullish outlook. Risks include margin pressure from open-source competition and potential legal disputes, but software growth and dividend safety offset concerns.
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Swedish telecom gear maker Ericsson said on Monday it has got an eight-year deal worth 12.5 billion Swedish crowns ($1.33 billion) to supply 5G communications equipment to VodafoneThree's UK mobile network.
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Ericsson stock (NASDAQ: ERIC) decreased by nearly 10% over the last five trading days, lagging behind the general market despite presenting a Q2 earnings report that exceeded expectations. The decline appears to be associated with a combination of macroeconomic worries, regional shortcomings, and cautious forecasts, which overshadowed substantial margin improvements and a notable return to profitability.
ERIC beats Q2 earnings forecasts on margin gains and cost cuts, but revenues fall short across key segments.
Telefonaktiebolaget LM Ericsson's Q2 results disappointed, with net sales falling 2% and revenue declines in key regions despite margin improvements and AI investment plans. Organic sales growth was 2%, but overall revenue dropped due to lower network investments in Asia and cautious enterprise strategy prioritizing margins over growth. 5G and AI remain limited catalysts; slow adoption and minimal 5G standalone deployments continue to temper growth expectations for Ericsson in the near term.
Telefonaktiebolaget LM Ericsson (publ) (NASDAQ:ERIC ) Q2 2025 Earnings Conference Call July 15, 2025 3:00 AM ET Company Participants Daniel Morris - Head of Investor Relations E. Borje Ekholm - President, CEO, Head of Segment Enterprise & Director Lars Sandstrom - Senior VP, Head of Group Function Finance & CFO Conference Call Participants Andreas Joelsson - DNB Carnegie, Research Division Andrew Michael Gardiner - Citigroup Inc., Research Division Felix Henriksson - Nordea Markets, Research Division Fredrik Lithell - Handelsbanken Capital Markets AB, Research Division Jakob Bluestone - BNP Paribas Exane, Research Division Sami Sarkamies - Danske Bank A/S, Research Division Sandeep Sudhir Deshpande - JPMorgan Chase & Co, Research Division Sébastien Sztabowicz - Kepler Cheuvreux, Research Division Simon Granath - ABG Sundal Collier Holding ASA, Research Division Ulrich Rathe - Sanford C.
Swedish telecom equipment maker Ericsson reported on Tuesday a bigger second-quarter adjusted operating profit than expected and said it would increase investments into AI.