Finance
Ericsson Slightly Lags Profit Expectations as North America Sales Slow Down
Published by Global Banking & Finance Review®
Posted on April 17, 2026
2 min readLast updated: April 17, 2026
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Ericsson’s Q1 2026 adjusted operating profit of SEK 5.2 billion ($566 million) slightly missed analyst expectations of SEK 5.4 billion, as sluggish North America sales—affected by tariff uncertainty and prior investments—partially offset gains elsewhere.
Ericsson lags profit expectations as AI demand drives up chip costs
By Gianluca Lo Nostro and Agnieszka Olenska
Ericsson's First-Quarter Results and Market Challenges
April 17 (Reuters) - Sweden's Ericsson reported a first-quarter core profit that slightly missed market expectations on Friday, citing increasing chip costs caused by artificial intelligence demand and a sales slowdown in North America.
Impact of AI Demand on Semiconductor Costs
The network equipment maker is facing rising input costs partially due to high demand for AI technology that is driving up prices of semiconductors, CEO Börje Ekholm said in a statement.
Supplier Collaboration and Cost Mitigation Strategies
"We are working together with our suppliers to mitigate this. But also, we will need to work with our customers to share the burden on this," finance chief Lars Sandström added in an interview with Reuters.
Financial Performance Overview
The company reported an adjusted operating profit of 5.2 billion Swedish crowns ($566 million), excluding restructuring charges, for the first quarter of 2026. Analysts polled by Infront were expecting 5.4 billion crowns on average.
Ericsson's Position in the Global Market
Ericsson, one of the main Western suppliers of network equipment alongside Finland's Nokia, is betting heavily on the U.S. market even as transatlantic ties have become strained under President Donald Trump's rule.
U.S. Market Exposure and Major Deals
The Swedish group has significant exposure to the United States, especially after winning a $14 billion deal with operator AT&T in 2023, which could help outweigh slower telecoms investments in other markets.
Regional Sales Performance
Sandström said sales in North America fell by a mid-single-digit percentage in the quarter, compared to a strong year-ago period that was boosted by tariff-related demand. Underlying market conditions in the region remain solid, he added.
Quarterly Net Sales and Analyst Expectations
The group reported quarterly net sales of 49.3 billion crowns, compared with an Infront poll estimate of 50.7 billion crowns.
($1 = 9.1869 Swedish crowns)
(Reporting by Gianluca Lo Nostro and Agnieszka Olenska in Gdansk; Editing by Milla Nissi-Prussak)
Key Takeaways
- •Adjusted Q1 2026 operating profit came in at SEK 5.2 billion, just below the SEK 5.4 billion forecast by analysts polled by Infront (ericsson.com).
- •Sales in North America slowed due to tariff‑related uncertainty and the impact of earlier network investments, weighing on regional performance (tipranks.com).
- •Despite North America’s slowdown, Ericsson continues to benefit from margin expansion and stronger free cash flow in recent quarters, supported by cost control and growth in other market areas (ericsson.com).
References
Frequently Asked Questions about Ericsson slightly lags profit expectations as North America sales slow down
1Why did Ericsson's Q1 2026 profit miss expectations?
Ericsson's profit missed expectations mainly due to a decline in North America sales caused by tariff uncertainty and previous network investments.
2What was Ericsson's adjusted operating profit in Q1 2026?
Ericsson reported an adjusted operating profit of 5.2 billion Swedish crowns, excluding restructuring charges, for Q1 2026.
3How did analysts' profit expectations compare to Ericsson's results?
Analysts expected an average of 5.4 billion Swedish crowns, slightly above Ericsson's reported 5.2 billion crowns.
4What were the main factors affecting Ericsson's North America sales?
North America sales were impacted by tariff uncertainty and the effects of prior network investments.
