Ericsson lags profit expectations as AI demand drives up chip bill

FREE Breaking News Alerts from StreetInsider.com!

E-mail Address

StreetInsider.com Top Tickers, 8/21/2026

1. ROST
2. WMT
3. SPY
4. AAP
5. HD
6. SFNC
7. FMG:AU
8. AVAH
9. JHX
10. FSUGY

April 17, 2026 1:20 AM EDT

A logo of Ericsson is seen outside the company's office in Kanata, Ontario, Canada April 17, 2023. REUTERS/Lars Hagberg

By Gianluca Lo Nostro and ‌Agnieszka Olenska

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.

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.

"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.

Ericsson 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.

The company's shares were down 1.6% in early Stockholm trading.

Ericsson, one of the main Western ​suppliers of network equipment alongside Finland's Nokia, ‌has been betting heavily on the U.S. market even as transatlantic ties have become strained under President Donald Trump's rule.

The ⁠Swedish group has significant U.S. exposure especially after winning a $14 billion deal with operator AT&T in 2023, which could help outweigh slower telecoms investments in other markets.

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.

The group's quarterly net sales fell 10% from a year ago to ‌49.3 billion crowns, below an Infront poll estimate of 50.7 billion crowns.

In a note to investors, J.P. Morgan said the ‌results were "soft to in-line" and warned there could be a read-across effect on ⁠Nokia's shares due to the weakness ‌reported in North America. ​Nokia fell 1.5% in early Helsinki trading.

($1 = 9.1869 Swedish crowns)

(Reporting by Gianluca Lo Nostro and Agnieszka Olenska in Gdansk; Editing by ‌Milla Nissi-Prussak)


Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In





Related Categories

Reuters

Related Entities

JPMorgan, Donald J. Trump