Ericsson posted fourth quarter earnings that blew past Wall Street expectations on Friday. The Swedish telecoms equipment maker reported adjusted operating profit of 12.26 billion crowns for the final three months of 2025.
$ERIC
ERICSSON LM TELEPHONE CO#earnings results: pic.twitter.com/gmlTMYv1FY— Earnings Today (@EarningsToday) January 23, 2026
That figure crushed the analyst consensus of 10.09 billion crowns. The earnings beat came as the company continues aggressive cost-cutting measures across its operations.
The company surprised investors with another announcement. Ericsson will return 15 billion Swedish crowns, roughly $1.7 billion, to shareholders through its first-ever buyback program.
Telefonaktiebolaget LM Ericsson (publ), ERIC
The repurchase plan will kick off after first quarter 2026 results come out. It will continue through 2027, giving shareholders a new way to see returns beyond dividends.
Speaking of dividends, those got a bump too. The annual payout rises to 3 crowns per share from 2.85 crowns last year.
Revenue also topped forecasts for the quarter. Net sales hit 69.3 billion crowns against expectations of 66.6 billion crowns.
Growth came primarily from Europe, the Middle East, and Africa. North American sales held steady during the period.
The cash position looks much healthier these days. Cost reductions helped, but so did the sale of Ericsson’s U.S.-based Iconectiv business.
That improved cash flow made the buyback possible. The company clearly feels confident enough in its financial position to return cash to investors.
Ericsson operates as one of only two Western suppliers of network equipment. Nokia is the other major player in this space.
Both companies have been dealing with weaker 5G investment trends. Ericsson responded by launching a deep restructuring program to maintain profitability.
The restructuring includes workforce reductions. Earlier this month, Ericsson announced plans to eliminate 1,600 jobs in Sweden.
The cuts aim to boost operational efficiency. The company also moved quickly last year to adjust its operations around U.S. import tariffs.
Finance chief Lars Sandström addressed potential market share changes in a Reuters interview. He discussed European Commission proposals to phase out high-risk suppliers in critical sectors.
Those proposals could benefit Ericsson and Nokia in European markets. However, Sandström said it’s too early to quantify the potential impact.
“If that comes into place, then of course we are ready to take that opportunity,” he told Reuters. He noted these regulatory initiatives typically take time to implement.
The fourth quarter results show Ericsson’s restructuring efforts are paying off. The company beat expectations on both the top and bottom lines while maintaining stable operations in North America.
The buyback program represents a vote of confidence from management. It signals they believe the worst of the 5G investment slowdown may be behind them.
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