Ericsson (NASDAQ:ERIC) Shares Gap Up Following Earnings Beat

Ericsson (NASDAQ:ERIC) gapped up prior to trading on Thursday following a better than expected earnings announcement. The stock had previously closed at $9.58, but opened at $10.65. Ericsson shares last traded at $10.3950, with a volume of 11,903,527 shares.

The communications equipment provider reported $0.18 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.14 by $0.04. Ericsson had a return on equity of 20.63% and a net margin of 10.72%. The company had revenue of $5.94 billion during the quarter, compared to analysts’ expectations of $5.59 billion. During the same quarter last year, the firm earned $1.37 earnings per share. The firm’s quarterly revenue was up 5.8% compared to the same quarter last year.

Ericsson Announces Dividend

The firm also recently declared a dividend, which was paid on Tuesday, September 29th. Stockholders of record on Tuesday, September 29th were issued a dividend of $0.1579 per share. The ex-dividend date was Tuesday, September 29th. Ericsson’s dividend payout ratio is currently 25.64%.

Key Headlines Impacting Ericsson

Here are the key news stories impacting Ericsson this week:

• Positive Sentiment: Q3 results exceeded expectations: Ericsson reported adjusted EPS of $0.18 versus the $0.14 consensus, while revenue rose to $5.94 billion from an expected $5.59 billion. Growth was driven primarily by higher sales in the Networks business. Ericsson reports third quarter results 2026
• Positive Sentiment: Profit decline was less concerning than the headline suggests: Quarterly profit fell largely because the prior-year period included a sizable divestment gain, while core profit declined less than analysts had anticipated. The earnings beat helped support the stock. Ericsson’s third-quarter core profit falls less than expected
• Positive Sentiment: Restructuring is intended to improve execution and margins: Ericsson will combine its North East Asia and South East Asia, Oceania and India operations into a new Asia-Pacific market area, while reallocating its Enterprise Wireless Solutions portfolio to capture synergies and better use R&D resources. Ericsson announces simplification of Group structure and changes to the Executive Team
• Positive Sentiment: 6G progress adds a longer-term catalyst: Ericsson and Verizon completed what they described as the first pre-standard outdoor 6G field call in the 7 GHz band, moving testing from the laboratory to a commercial network site. Verizon and Ericsson accelerate 6G development
• Negative Sentiment: Higher component costs remain a risk: Management warned that rising component costs will pressure profitability next year, limiting the sustainability of the positive earnings reaction. Ericsson to streamline structure as component costs pressure profitability

Wall Street Analysts Forecast Growth

A number of brokerages recently issued reports on ERIC. Citigroup reissued a “neutral” rating on shares of Ericsson in a research report on Wednesday, July 15th. JPMorgan Chase & Co. decreased their target price on shares of Ericsson from $11.40 to $10.20 and set a “neutral” rating on the stock in a research report on Thursday, October 8th. Weiss Ratings cut shares of Ericsson from a “buy (b)” rating to a “buy (b-)” rating in a research report on Friday, August 28th. Danske raised shares of Ericsson from a “hold” rating to a “buy” rating in a research note on Wednesday, July 15th. Finally, Morgan Stanley lowered shares of Ericsson from an “equal weight” rating to an “underweight” rating and lowered their target price for the stock from $11.00 to $9.00 in a research note on Tuesday, September 22nd. Two equities research analysts have rated the stock with a Buy rating, three have given a Hold rating and one has issued a Sell rating to the company’s stock. Based on data from MarketBeat.com, the company currently has an average rating of “Hold” and a consensus target price of $9.60.

Institutional Trading of Ericsson

Several hedge funds have recently made changes to their positions in the business. Advisors Preferred LLC acquired a new stake in shares of Ericsson during the first quarter worth about $493,000. Bank of New York Mellon Corp boosted its stake in shares of Ericsson by 8.5% in the first quarter. Bank of New York Mellon Corp now owns 160,581 shares of the communications equipment provider’s stock valued at $1,810,000 after purchasing an additional 12,534 shares during the period. Finally, Public Employees Retirement System of Ohio acquired a new position in shares of Ericsson in the second quarter valued at approximately $15,812,000. Institutional investors and hedge funds own 7.99% of the company’s stock.

Ericsson Stock Up 8.9%

The business’s fifty day moving average is $9.90 and its two-hundred day moving average is $10.95. The stock has a market cap of $35.18 billion, a price-to-earnings ratio of 13.38, a PEG ratio of 1.80 and a beta of 0.96. The company has a quick ratio of 0.89, a current ratio of 1.12 and a debt-to-equity ratio of 0.21.

About Ericsson

Telefonaktiebolaget LM Ericsson, commonly known as Ericsson, is a Swedish telecommunications and technology company that provides communications infrastructure, software, and related services to telecommunications operators and enterprises worldwide. The company was founded in 1876 by Lars Magnus Ericsson and is headquartered in Stockholm, Sweden.

Ericsson’s offerings include mobile network equipment and services for 4G and 5G networks, radio access systems, core networks, transport solutions, and network management software.