Financial Wire

Research Alert: Ericsson: Q1 2026 Core Earnings Meet Consensus, Margins Under Pressure

-- CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:

Ericsson's Q1 2026 core net income of SEK4.7B (-54% Q/Q, +12% Y/Y) was seasonally in line with consensus, while revenue declined to SEK49.3B (-29% Q/Q, -10% Y/Y) due to currency headwinds and lower North American network spending. Improving organic demand across all segments reflects continued 5G deployments and geographic diversification, supported by growth in the Networks, Cloud Software and Services, and Enterprise segments. Management expects the RAN market to remain flattish in 2026, with Q2 growth aligned with historical seasonality. Networks' adjusted EBITA margin declined to 19.3% from 21.0% due to higher semiconductor costs and supply chain pressures, while Cloud Software improved to 5.3% from 1.2% on better efficiency and product mix. Enterprise continues to weigh on profitability with a -34.6% EBITA margin. We believe gradual earnings progression is expected in 2H 2026 as cost discipline and efficiency measures support margin recovery despite ongoing input cost pressures.

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