Ericsson Beats Third-Quarter Earnings Estimates and Consolidates Asian Operations

Ericsson delivered third-quarter adjusted earnings before interest, taxes, and amortisation (EBITA) of SEK 10.1 billion ($1 billion), exceeding the average analyst estimate of SEK 7.93 billion compiled by Bloomberg, as reported by The Next Web (https://thenextweb.com/news/ericsson-q3-2026-narvinger-apac-restructure). Organic sales, which exclude acquisitions, divestments, and foreign currency fluctuations, rose 7% year over year.

Reported net sales reached SEK 59.5 billion, up from SEK 56.2 billion in the third quarter of the previous year. Revenue growth was led by the Networks division, with sales expanding in three of Ericsson's four market areas. Adjusted EBITA margin reached 17.0%, compared to 28.1% a year earlier when results were lifted by a one-off capital gain of SEK 7.6 billion; excluding that gain, adjusted EBITA grew. Net income stood at SEK 5.8 billion, down from SEK 11.3 billion, while free cash flow before M&A was SEK 4.9 billion. The company deployed SEK 4.8 billion toward share repurchases.

Following the earnings report, Ericsson shares climbed as much as 11% during trading in Stockholm, representing the stock's highest intraday rise since January 23 and bringing its year-to-date gain to 18%.

New Chief Executive Officer Per Narvinger, who took leadership of the company this month following cost-reduction programs executed by predecessor Börje Ekholm, described the quarter's performance as strong. However, Narvinger highlighted several medium-term challenges, noting that the broader radio access network (RAN) market remains flat, geopolitical uncertainty persists, and higher component costs will pressure gross margins next year. Chief Financial Officer Lars Sandström told Bloomberg that Ericsson mitigated component cost increases through short-term product development measures and intends to pass those expenses to clients once existing contracts expire. Narvinger added on Bloomberg TV that third-quarter volumes partly reflected advance purchases by customers seeking to get ahead of price adjustments.

Alongside its financial results, Ericsson detailed a structural overhaul set to take effect on January 1, 2027. The company will merge Market Area North East Asia and Market Area South East Asia, Oceania and India into a consolidated Market Area Asia-Pacific (APAC). Patrick Johansson, currently head of Market Area Europe, Middle East and Africa (EMEA), will lead the combined APAC entity, with Ericsson beginning recruitment for a new EMEA leader.

The restructuring will also dissolve the Enterprise Wireless Solutions business area. Its Neutral Host solutions and Private 5G portfolios will be integrated into Business Area Networks, while Wireless WAN will continue as a standalone unit reporting to Americas market area head Yossi Cohen. Three Executive Team members—Enterprise Wireless Solutions head Åsa Tamsons, North East Asia head Chafic Nassif, and South East Asia, Oceania and India head Andres Vicente—will step down from their current roles on December 31.

Narvinger noted that the operational consolidation is intended to sharpen focus in Asia and improve competitiveness against satellite broadband provider Starlink, which is increasingly vying for traditional telecom operator market share. Unlike rival Nokia, which has pivoted toward artificial intelligence data centre equipment and integrated Nvidia chips into its radio access network products, Ericsson continues to operate as a pure-play supplier dedicated to telecom network operators.