Ericsson first-quarter profit misses estimates on sluggish sales
The company has focused on slashing costs, eliminating about 5,000 jobs worldwide in 2025
Add BT as a preferred source
DeeperDive is a beta AI feature. Refer to full articles for the facts.
[ZURICH] Ericsson earnings missed analysts’ forecasts in the first quarter, as the Swedish company struggled in a weak market for telecommunications equipment and rising chip costs, in part due to the artificial intelligence boom.
Adjusted earnings before interest, taxes and amortisation were 5.6 billion kronor (S$776 million), down 20 per cent from a year earlier, the Stockholm-based company said in a statement on Friday (Apr 17). That compared to an average analyst estimate of 5.8 billion kronor, according to data compiled by Bloomberg. Revenue in the period also missed expectations.
“We are facing increasing input costs, especially in semiconductors,” CEO Borje Ekholm said. “Our ambition is to offset these challenges, by working closely with customers and suppliers, and through product substitution and efficiency actions.”
Ericsson and other telecommunications equipment makers have wrestled for years with weak demand from phone companies as anticipated spending on 5G network upgrades failed to materialise. In response, the company has focused on slashing costs, eliminating about 5,000 jobs worldwide in 2025 and plans to continue to reduce expenses at a similar pace this year.
The company also announced its first-ever buyback in January and said on Thursday that it would start the 15 billion-kronor programme as soon as Apr 23.
While Finnish rival Nokia is attempting to position itself as a go-to European supplier as the continent seeks to move away from US technology companies and Chinese network kit makers, Ekholm has called the push for European tech sovereignty dangerous. The US is Ericsson’s biggest market and one of its most important projects is a US$14 billion contract to modernise AT&T’s wireless network that it won in 2023.
SEE ALSO
Navigate Asia in
a new global order
Get the insights delivered to your inbox.
The telecommunications sector is also trying to find ways to capitalise on the booming demand for AI applications, and the commensurate spend on the infrastructure required to power the technology. Nokia has reorganised its business to prioritise AI networking after a US$1 billion equity investment by chip giant Nvidia announced last year.
Ericsson shares rose 1.9 per cent to close at 110.25 kronor in Stockholm on Thursday. The shares have gained 22 per cent this year. BLOOMBERG
Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free.
Share with us your feedback on BT's products and services
