TLDR
- Ericsson (ERICb) stock rose 8% Thursday after Q3 sales topped forecasts.
- Net sales rose 6% to 59.5 billion crowns, versus 55.4 billion expected.
- Adjusted EBITA fell 36% to 10.1 billion crowns but beat the 7.87 billion forecast.
- New CEO Per Narvinger warned that component costs will pressure margins next year.
- Q4 guidance calls for an adjusted gross margin of 49% to 51%.
Ericsson (ERICb) stock rose 8.44% on Thursday. The move came after the telecom gear maker posted third-quarter sales that beat expectations.
Telefonaktiebolaget LM Ericsson (publ), ERIC
Net sales climbed 6% to 59.5 billion crowns. Analysts polled by LSEG had expected 55.4 billion.
Organic sales growth came in at 7%. Sales in North America rose slightly, helped by project phasing.
Networks, the largest unit, saw sales rise 9% to 38.7 billion crowns. Cloud Software and Services grew 3% to 15.8 billion crowns.
Enterprise was the weak spot. Sales fell 10% to 4.6 billion crowns, partly due to the iconectiv divestment.
Profit Falls, But Beats Forecasts
Adjusted EBITA dropped 36% to 10.1 billion crowns. A year earlier, it stood at 15.8 billion.
ERICSSON $ERIC Q3’26 EARNINGS HIGHLIGHTS
🔹 Net Sales: SEK 59.478 b. (Est. SEK 55.40 b.) 🟢
🔹 EPS: SEK 1.77
🔹 Adj. Gross Margin: 47.7% (Est. 47.3%) 🟢
🔹 Adj. EBITA: SEK 10.121 b. (Est. SEK 7.87 b.) 🟢Other Q3 Metrics:
🔹 Adj. EBITA Margin: 17.0% (Est. 14.2%) 🟢
🔹 Organic… pic.twitter.com/hxNuytekRS— Wall St Engine (@wallstengine) October 15, 2026
That still looked good against the Street. Analysts had expected only 7.87 billion crowns.
The adjusted EBITA margin narrowed to 17.0% from 28.1%. Even so, it topped the 14.2% forecast.
Efficiency measures did some of the heavy lifting. Ericsson said it will keep cutting costs and simplify its operating structure.
Not every line item was a winner, though. Component costs rose in the quarter, and the company flagged that pressure.
Costs Weigh on the Outlook
Ericsson had already warned about this in July. It said rising memory chip costs, driven by surging AI demand, were squeezing the business.
CEO Per Narvinger repeated the concern in the earnings statement. “The RAN market is flat, geopolitical uncertainty remains elevated and component costs are a headwind to gross margin,” he said.
He said those costs will weigh on gross margins next year. Geopolitical uncertainty also remains high.
On the market side, Ericsson expects the global radio access network equipment market to stay stable in 2026. That points to a flat backdrop rather than a rebound.
For the fourth quarter, Ericsson expects Networks sales growth broadly in line with normal seasonal patterns. It also guided to an adjusted gross margin of 49% to 51%.
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