Company Reports

Ericsson reported decent second-quarter results, with relatively resilient revenue and margins offset by one-time revenue items in the year-ago period. Investors were concerned by news of rising input costs and margin pressure from increased network rollout volumes, sending shares down 10%.

Ericsson operates globally but primarily competes in Western-aligned markets where government restrictions have excluded Chinese competitors. Per Omdia, Ericsson’s global market share excluding China was 36% in 2024, leading Nokia and Huawei. By maintaining leading market share, Ericsson gains operating leverage on the massive research and development required to develop new technology and contribute to each successive generation of wireless standards.

We are transferring coverage of Nokia and Ericsson, two of the largest providers of mobile network equipment and software globally. While these firms focus on mobile connectivity, they have begun diversifying revenue streams, with Nokia in optical networking and Ericsson in cloud software.

Ericsson operates globally but primarily competes in Western-aligned markets where government restrictions have excluded Chinese competitors. Per Omdia, Ericsson’s global market share excluding China was 36% in 2024, leading Nokia and Huawei. By maintaining leading market share, Ericsson gains operating leverage on the massive research and development required to develop new technology and contribute to each successive generation of wireless standards.

Ericsson reported mostly positive first-quarter results, with 6% organic sales growth offset by significant currency-related headwinds, resulting in a 10% decline in reported sales. The firm also announced its first share buyback program, allocating SEK 15 billion for use over the next 12 months.

Ericsson made significant progress on enhancing profitability in the fourth quarter while also experiencing a sales rebound, though dampened by currency headwinds. Reported sales fell to SEK 237 million in 2025, but, adjusted for currencies, sales were up 2%, including 6% in the fourth quarter.

In Ericsson's core business, it sells mobile network infrastructure equipment, like radios and antennas, and related software and services to wireless carriers. This networks business accounts for over 65% of the firm's revenue and nearly all its profit.

Ericsson's third-quarter sales were uninspiring, but margins continue expanding on cost reductions, and, more importantly, the firm announced the signing of another big deal, this time with Vodafone, sending shares soaring.

In Ericsson's core business, it sells mobile network infrastructure equipment, like radios and antennas, and related software and services to wireless carriers. This networks business accounts for over 65% of the firm's revenue and nearly all its profit.

In Ericsson's core business, it sells mobile network infrastructure equipment, like radios and antennas, and related software and services to wireless carriers. This networks business accounts for over 65% of the firm's revenue and nearly all its profit.

Ericsson reported 2% year-over-year organic sales growth; however, a SEK 5 billion currency headwind caused reported sales to drop 6% during the second quarter. The 13% adjusted EBITA margin was up from 7% the previous year.

Ericsson is at the forefront of the global 5G transformation. Even as a global leader, however, the introduction of Open-RAN, or radio access network—a key development of 5G—opens the door for increased competition in the telecom equipment industry. We expect carrier investment in 5G to continue, but the changing industry and increasing competition will likely hurt the firm.

In a period of uncertain global wireless carrier demand and looming tariffs, Ericsson delivered impressive results in the first quarter. The firm delivered 3% revenue growth (flat in constant currency) and 12% EBITA margins. Improving carrier activity should continue to drive 2025 results.

Ericsson is at the forefront of the global 5G transformation. Even as a global leader, however, the introduction of Open-RAN, or radio access network—a key development of 5G—opens the door for increased competition in the telecom equipment industry. We expect carrier investment in 5G to continue, but the changing industry and increasing competition will likely hurt the firm.

The data center and communications equipment stocks we cover traded down by midsingle digits while investors pushed tower stocks higher in response to the US tariff announcement April 2. We see little risk of material tariff-related headwinds for these businesses, and therefore we maintain our fair value estimates across our coverage.

Ericsson's fourth-quarter 2024 results echoed a challenging global radio access network, or RAN, market. We've slightly lowered our near-term growth rates for Nokia's network business, which is offset by the time value of money. We maintain our SEK 95 fair value estimate and no moat rating.

Ericsson is at the forefront of the global 5G transformation. Even as a global leader, however, the introduction of Open-RAN, or radio access network—a key development of 5G—opens the door for increased competition in the telecom equipment industry. We expect carrier investment in 5G to continue, but the changing industry and increasing competition will likely hurt the firm.

After taking a fresh review of Ericsson, we are maintaining our SEK 95 fair value estimate and no-moat rating.

Ericsson is at the forefront of the global 5G transformation. Even as a global leader, however, the introduction of Open-RAN, or radio access network—a key development of 5G—opens the door for increased competition in the telecom equipment industry. We expect carrier investment in 5G to continue, but the changing industry and increasing competition will likely hurt the firm.

Ericsson’s third-quarter sales and profits were much better than we anticipated, mostly because of a massive rebound in the crucial North American market. Overall, global wireless network spending remains depressed, but we still believe most markets require significantly more carrier spending on 5G networks. Though carrier investment should continue going through peak-and-trough cycles, we still believe Ericsson will be a main beneficiary, despite the lack of a moat we see for the firm. We are raising our fair value estimate to SEK 95 from SEK 92 to reflect the strong quarter, but our long-term outlook remains the same.