LM Ericsson Telephone (ERIC) shares experienced a significant pre-market plunge of 5.84% on Friday. The sharp decline followed the release of the company's first-quarter financial results for 2026, which fell short of market expectations.
The telecommunications equipment giant reported quarterly earnings of $0.03 per share, missing the analyst consensus estimate of $0.13 by 76.92%. Quarterly sales of $5.397 billion also lagged behind the expected $5.720 billion. In Swedish krona terms, net sales were SEK 49.33 billion, below market expectations, while adjusted EBITA of SEK 5.56 billion came in lower than consensus estimates.
Company executives cited increasing input costs, especially for semiconductors driven by artificial intelligence demand, as a key factor pressuring margins. Additionally, a sales slowdown in North America contributed to the weaker-than-expected performance. Despite these challenges, Ericsson announced a SEK 15 billion share buyback program approved by the Board of Directors, though this positive development was overshadowed by the earnings disappointment in pre-market trading.