Analysts anticipate sales will dip 1.7% to 55.28 billion kronor, reflecting a broader slowdown in the U.S. wireless market. As capital shifts toward artificial intelligence data-center infrastructure, Ericsson’s path to growth remains tied to cost optimization rather than a surge in network roll-outs. J.P. Morgan analysts note that until the transition to 6G technology gains momentum, margins will remain the primary metric for evaluating the company’s performance.
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Ericsson Faces Margin Pressure Ahead of Third-Quarter Results
With wireless infrastructure demand stagnating, Ericsson investors are bracing for a sharp drop in net profit to 5.09 billion Swedish kronor when the company reports third-quarter earnings Thursday. Last year’s figures were bolstered by the one-time sale of its Iconectiv business, masking the current struggle to maintain growth.
Attention will center on fourth-quarter guidance, particularly for the networks gross margin. Jefferies analysts warn that margins could slide to 48%, squeezed by rising component costs and ongoing deployment expenses. While Ericsson previously guided for a third-quarter adjusted gross margin between 48% and 50%, the market remains skeptical about the company's ability to sustain profitability amid weak global demand. Investors will also monitor whether the anticipated 5% quarterly growth in network sales—surpassing normal seasonal trends—materializes as promised.
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