TLDR
- Ericsson’s adjusted operating profit in the fourth quarter of 2025 was 12.26 billion kroner, surpassing analyst forecast of 10.09 billion kroner
- First ever $1.7 billion share repurchase program announced, running from Q1 2026 through 2027
- Fourth quarter net sales were 69.3 billion kroner, compared to estimates of 66.6 billion kroner
- Dividend increased from 2.85 kroner to 3 kroner per share
- Company cuts 1,600 Swedish jobs to improve efficiency
Ericsson delivered a fourth-quarter performance that crushed analyst expectations. The Swedish telecom equipment maker posted an adjusted operating profit of 12.26 billion kroner for the fourth quarter of 2025.
Wall Street had forecast only 10.09 billion kroner. The 21% profit increase marks a turning point for the company’s restructuring efforts.
The real headline came with Ericsson’s announcement of a share buyback worth 15 billion krona. That translates to about $1.7 billion returning to investors.
Telefonaktiebolaget LM Ericsson (publ), ERIC
This marks the company’s first-ever buyback program. The buyback will start after the publication of the profit figures for the first quarter of 2026 and will run until 2027.
Shareholders again made gains with the dividend announcement. The annual payout increases from 2.85 kroner to 3 kroner per share.
Sales exceed optimism
Sales figures in the fourth quarter also exceeded expectations. Net sales amounted to 69.3 billion kroner, against the consensus of 66.6 billion kroner.
Europe, the Middle East and Africa drove sales growth. North American operations remained stable throughout the quarter.
Ericsson is one of the two major suppliers of Western network equipment, alongside Nokia. Both companies have faced headwinds from declining 5G investment levels.
The improved results are the result of aggressive cost management. Ericsson also sold its US-based Iconectiv business, strengthening its cash position.
That influx of cash made the buyback program financially feasible. Management clearly has confidence in the company’s future trajectory.
The restructuring campaign continues
The job losses remain part of Ericsson’s efficiency drive. The company announced 1,600 position eliminations in Sweden earlier this month.
These workforce reductions are intended to streamline operations and increase margins. Ericsson also quickly adapted to the US import tariffs imposed last year.
CFO Lars Sandström discussed potential opportunities in Europe during an interview with Reuters. The European Commission has proposed removing high-risk suppliers from critical infrastructure.
Such regulatory changes could benefit Ericsson and Nokia. However, Sandström cautioned against expecting immediate results.
“If that happens, then of course we are ready to seize that opportunity,” he said. He emphasized that these policy changes usually take a long time to implement.
The strong quarterly results confirm Ericsson’s strategic direction. Both sales and profits exceeded expectations, while maintaining North American stability.
The buyback program sends a clear message to the market. Management believes the company has weathered the worst of the 5G slowdown.
Ericsson’s cash generation improved thanks to both operational changes and asset sales. The Iconectiv divestiture provided funding while cost savings increased profitability.
The fourth quarter results show that the restructuring plan is working. The company achieved both sales growth and profitability while coping with challenging market conditions.
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