Ericsson Warns On Growth As US Tariffs And Asia Slowdown Create Uncertainty

Zinger Key PointsEricsson misses revenue estimates as Asia sales slump, but posts stronger margins and EPS beats consensus.Dividend payout continues despite sales decline; Ericsson warns of ongoing tariff and macroeconomic uncertainty.Up Next: Get 5 Dark Horse Stocks Wall Street Is Quietly Loading Up OnEricsson(NASDAQ:ERIC)reported second-quarterfiscal 2025 results on Tuesday. The stock price dropped after the print.Ericsson earns most of its revenue by selling network infrastructure, software solutions, and professional services.The Swedish telecom equipment maker’s sales declined 6% year-over-year (Y/Y) in local currency to 56.13 billion Swedish Krona ($5.80 billion), driven by a 6% decline in Europe, the Middle East, and Africa, a 28% decline in South East Asia, and a 17% decline in North East Asia.Also Read:Ericsson, Google Cloud Launch New Tool To Help Telecoms Build Faster, Smarter NetworksLower sales in Global Communications Platform and Technologies and New Businesses were partly offset by organic sales growth inEnterprise Wireless Solutions. The revenue missed the analyst consensus estimate of $5.94 billion.Organic sales grew by 2%, with 10% growth in the Americas market offset by declines in other market areas.Adjusted gross margin improved to 48.0% from 43.9% Y/Y, supported by improvements in all segments, despite currency headwinds.Adjusted EBIT margin was 12.6% versus (19.9)% Y/Y. Adjusted EBITA margin improved to 13.2% from 6.8% a year ago.Ericsson reported an EPS of SEK 1.37 (14 cents) versus SEK (3.34) Y/Y. It beat the analyst consensus estimate of 12 cents.Free cash flow before M&A was SEK 2.6 billion in the quarter versus SEK 7.6 billion Y/Y. As of June 30, 2025, net cash stood at SEK 36.04 billion.Trending Investment OpportunitiesAdvertisementArrivedBuy shares of homes and vacation rentals for as little as $100.Get StartedWiserAdvisorGet matched with a trusted, local financial advisor for free.Get StartedPoint.comTap into your home's equity to consolidate debt or fund a renovation.Get StartedRobinhoodMove your 401k to Robinhood and get a 3% match on deposits.Get StartedShareholders approved the proposed 2024 dividend of SEK 2.85 per share at the AGM on March 25, 2025. The company will pay the dividend in two installments. It made the first payment of SEK 1.43 per share to shareholders on April 1, 2025, based on the record date of March 27. The second payment of SEK 1.42 per share will follow on October 2, 2025, with a record date of September 29.Ericsson stock is down 3% year-to-date, lagging the NASDAQ Composite Index’s 7% returns during the period as it grappled with U.S. semiconductor sanctions and tariff policies.OutlookEricsson said increased uncertainty remains on the outlook, both in terms of the potential for further tariff changes and in the broader macroeconomic environment. It expects third-quarter sales growth for Networks to be below the 3-year average seasonality, reflecting higher second-quarter IPR revenue from previously unlicensed periods.The company expects quarterly Cloud Software and Services sales to resemble the 3-year average seasonality.Based on its current assessment of announced tariffs, it expects a quarterly adjusted gross margin of 48% to 50% for Networks.Price Action:ERIC stock was trading lower by 1.91% to $7.69 premarket at last check Tuesday.Read Next:Ericsson, Supermicro Partner To Bring 5G-Powered AI To Factories, Retail And HospitalsPhoto via ShutterstockLoading...Loading...ERICTelefonaktiebolaget L M Ericsson$7.71-1.66%Stock Score Locked: Edge Members OnlyBenzinga Rankings give you vital metrics on any stock – anytime.Unlock RankingsEdge RankingsMomentum64.46Growth17.23Quality80.95Value58.23Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs© 2025 Benzinga.com. . .EarningsAnalyst RatingsOptionsDividendsIPOsDate▲▼ticker▲▼name▲▼Actual EPS▲▼EPS Surprise▲▼Actual Rev▲▼Rev Surprise▲▼Click to see moreEarningsupdatesEarnings CalendarNever Miss Important CatalystsSort by estimates, projected upside, profit surprises, and more to easily find new stocks to invest in or check up on your portfolio.Click to JoinPosted In:EarningsNewsGuidanceTop StoriesMoversTech