Sweden's Ericsson Q2 sales miss estimates on lower IPR licensing weakness

Telefonaktiebolaget LM Ericsson

14/07/2026 06:10

Overview
Sweden telecom equipment maker's Q2 net sales fell 6% yr/yr, missing analyst expectations
Adjusted EBIT for Q2 beat analyst expectations, aided by margin expansion in Cloud Software and Services
Company returned SEK 8.2 bln to shareholders, including SEK 3.2 bln in share repurchases

Outlook
Ericsson expects some pressure on Networks adjusted gross margin in Q3 due to higher volumes of network rollout projects
Company will continue internal measures and pricing actions to offset component cost inflation
Ericsson says it is positioned to capitalize as AI adoption increases in connectivity

Result Drivers
LOWER IPR LICENSING REVENUE - Co said organic sales declined mainly due to lower IPR licensing revenues, reflecting a non-recurring benefit from a partial settlement in the prior year
MARGIN IMPROVEMENT - Adjusted gross margin rose, supported by solid operational execution and improved margins in Mobile Networks and Cloud Software and Services
COST INFLATION ACTIONS - Co said it took action to mitigate component cost inflation, with further measures and pricing actions planned

Company press release: ID:nWkr7k3CsT

Key Details
Metric
Beat/Miss
Actual
Consensus Estimate
Q2 Net Sales
Miss
SEK 52.69 bln
SEK 53.56 bln (12 Analysts)
Q2 EPS
 
SEK 1.22
 
Q2 Net Income
 
SEK 4.08 bln
 
Q2 Gross Margin
 
45.80%
 
Q2 Adjusted EBIT
Beat
SEK 6.52 bln
SEK 6.42 bln (9 Analysts)
Q2 Adjusted Gross Margin
 
48.40%
 
Q2 EBIT
 
SEK 5.92 bln
 
Q2 EBITA
 
SEK 6.28 bln
 
Q2 EBITA Margin
 
11.90%
 

Analyst Coverage
The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 5 "strong buy" or "buy", 11 "hold" and 7 "sell" or "strong sell"
The average consensus recommendation for the communications & networking peer group is "buy."
Wall Street's median 12-month price target for Telefonaktiebolaget LM Ericsson is SEK101.25, about 10.2% below its July 13 closing price of SEK112.75
The stock recently traded at 16 times the next 12-month earnings vs. a P/E of 15 three months ago

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)