April 17 - Sweden’s Ericsson told investors that its first-quarter core profit came in slightly under market forecasts, a result it attributed to rising chip costs driven in part by artificial intelligence demand and a slowdown in sales in North America.
The telecom equipment group reported an adjusted operating profit of 5.2 billion Swedish crowns for the first quarter of 2026, excluding restructuring charges. That result compared with an average analyst expectation of 5.4 billion crowns as polled by Infront.
Net sales for the quarter were reported at 49.3 billion crowns, below the Infront poll estimate of 50.7 billion crowns. The company flagged input-cost pressure, particularly in semiconductors, as a notable factor weighing on margins.
In a company statement, Chief Executive Börje Ekholm said: "We are facing increasing input costs, especially in semiconductors, caused in part by AI demand," describing the impact of component pricing on the quarter.
Ericsson is identified in the industry as one of the main Western suppliers of network equipment, alongside Finland's Nokia, and the group is placing a significant strategic emphasis on the U.S. market. The company noted that it remains heavily exposed to the United States, a position that is particularly relevant after securing a $14 billion deal with AT&T in 2023. Ericsson indicated that such U.S. exposure could help offset slower telecoms investment elsewhere.
The company’s commentary highlighted two immediate headwinds - higher semiconductor input costs and a sales slowdown in North America - while also pointing to its sizeable U.S. contract footprint as a countervailing factor. The company reported the quarter using an exchange rate of $1 = 9.1869 Swedish crowns in its public figures.
Context and implications
While the reported adjusted operating profit missed the Infront consensus by a narrow margin, Ericsson emphasizes that higher component costs - particularly in chips influenced by AI demand - were a central driver of the deviation. At the same time, the company’s large-scale U.S. contract exposure remains an important element of its revenue profile.