Ericsson posted an adjusted earnings before interest, taxes and amortisation of SEK 10.1bn ($1bn) in the third quarter, beating the SEK 7.93bn average analyst estimate compiled by Bloomberg. The Swedish telecom equipment supplier saw its organic sales rise 7% while restructuring its Asian units into a single regional market.
Networks Growth Drives SEK 59.5 Billion in Reported Sales
Reported sales reached SEK 59.5bn for the quarter, climbing from SEK 56.2bn during the same period a year earlier, according to the Swedish company’s results statement. Organic sales, which strip out acquisitions, divestments and currency effects, rose 7% overall. Higher sales in Networks drove most of this growth, lifting figures across three of Ericsson’s four market areas.
Adjusted EBITA dropped from SEK 15.8bn a year earlier, a prior period that included a SEK 7.6bn capital gain. Without that specific gain, adjusted earnings actually rose. The adjusted EBITA margin landed at 17.0%, compared with 28.1% previously. Net income fell to SEK 5.8bn from SEK 11.3bn, while free cash flow before M&A hit SEK 4.9bn. During the same window, Ericsson spent SEK 4.8bn buying back its own shares.
Stock Market Surge Follows Third-Quarter Beat
Company shares rose as much as 11% in Stockholm on Thursday, marking their biggest intraday gain since 23 January and pushing their total rise for 2026 to 18%. Chief Executive Per Narvinger, who took over the top post this month, called the figures strong third-quarter results.
His predecessor, Börje Ekholm, previously cut expenses and headcount. Narvinger noted that market conditions remain challenging. “Looking ahead, the RAN market is flat, geopolitical uncertainty remains elevated and component costs are a headwind to gross margin next year,” Narvinger said.
To counter component expense pressures, Ericsson implemented short-term measures in product development. Chief Financial Officer Lars Sandström explained that the company intends to pass those increased costs on to customers when current contracts expire. Narvinger also pointed out on Bloomberg TV that part of the quarter’s demand surge came from customers buying equipment ahead of upcoming price increases.
Structural Overhaul Combines Asian Units and Restructures Enterprise Wireless
Starting 1 January 2027, Market Areas North East Asia and South East Asia, Oceania and India will merge into a single Market Area Asia-Pacific (APAC). Patrick Johansson, currently leading Market Area Europe, Middle East and Africa (EMEA), will take charge of the new APAC region. Ericsson is actively recruiting a replacement to head EMEA.
Simultaneously, the Enterprise Wireless Solutions business area is being dismantled. Neutral Host solutions and Ericsson Private 5G will transfer directly into Business Area Networks. Wireless WAN will operate as a standalone business reporting to Yossi Cohen, who heads Market Area Americas.
Three Executive Team members will transition from their current positions on 31 December: Åsa Tamsons, head of Enterprise Wireless Solutions; Chafic Nassif, head of North East Asia; and Andres Vicente, head of South East Asia, Oceania and India. Narvinger stated that the executive team will become leaner and more balanced in terms of responsibilities.
These structural changes aim to sharpen Ericsson’s focus on the Asian market and improve its competitive standing against Elon Musk’s Starlink, which poses an increasing challenge to traditional telecom operators. Meanwhile, Finnish competitor Nokia has restructured its own operations to prioritize networking equipment for AI data centers and is integrating Nvidia chips into its radio access networks. Ericsson maintains its position as a pure-play supplier of equipment for telecom operators.
