Ericsson posts revenue rise on US demand while tariffs in focus

STOCKHOLM, Jan 24 (Reuters) – Ericsson (ERICb.ST), reported on Friday a rise in fourth-quarter revenue and adjusted operating profit as the North American market returned to growth even as the Swedish telecom equipment maker keeps a watch on potential U.S. tariffs.

Net sales rose 1% to 72.9 billion crowns ($6.66 billion), beating estimates of 72.5 billion, but missed operating profit estimates.

Demand from telecom companies such as AT&T (T.N), and Verizon (VZ.N), pushed up quarterly sales in North America by 54%, yet concerns lingered over potential tariffs by the U.S. government on EU companies.

U.S. President Donald Trump has warned of tariffs against imports from the EU and other countries saying they had “troubling trade surpluses with the United States”.

“When it comes to tariffs, we don’t know what’s going to happen. I think everyone is waiting to see what is happening there,” CFO Lars Sandström told Reuters in an interview.

“We have a global production system today, with production facilities in the U.S., so depending on what’s happening, we can adjust over time.”

Demand recovery in from the high-margin North American market helped lift Ericsson’s gross margin to 46.3% from 41.1% while sales from low-margin markets such as India fell after posting rapid growth in 2023.

However, Ericsson has now signed more deals with Indian operators such as Bharti Airtel and Vodafone Idea .

“In the beginning of the year, we see a stable, continued level (in India), and then we will see at the end of the year if there is an increase,” Sandström said.

Operating profit excluding restructuring costs and impairments stood at 9.8 billion crowns, up 7.4 billion, yet fell short of the 10.3 billion seen in an LSEG poll of analysts.

The company reduced its headcount by 6,000 employees to about 94,000 in 2024.

($1 = 10.9536 Swedish crowns)