Telefonaktiebolaget LM Ericsson

XMUN:ERCB

Revenue: Ericsson reported Q1 net sales of SEK 55 billion, with organic sales stable year-on-year and reported sales up 3% due to currency benefits.

Margins: Gross margin improved significantly to 48.5% from 42.7% last year, and EBITA margin reached 12.6%, with broad-based improvements across all segments.

Regional Performance: Strong growth in the Americas, with sales up 20% year-over-year, driven by North America, while sales declined in other regions, especially India.

Outlook: Management expects Q2 to follow typical seasonal patterns, with networks gross margin forecasted between 48% and 50%, though volatility in currencies and tariffs add uncertainty.

Cost Actions: Operating expenses remained flat year-on-year despite inflation, supported by ongoing cost reduction and productivity initiatives.

Tariffs & Supply Chain: Tariffs are expected to have a negative 1 percentage point impact on Q2 margins, but Ericsson highlighted its diversified supply chain as a mitigating factor.

Competitive Environment: Competition, particularly from Chinese vendors, remains intense outside North America, impacting some regional sales performance.