Home / Business and Economy / Ericsson Surges on Strong Earnings, $1.7B Buyback Plan
Ericsson Surges on Strong Earnings, $1.7B Buyback Plan
24 Jan
Summary
- Ericsson reported Q4 net profit of 8.56 billion SEK, exceeding analyst forecasts.
- The company announced a proposed $1.7 billion share buyback program and increased dividend.
- Ericsson sees significant opportunities in the growing defense sector for its technology.
Ericsson's stock experienced a substantial surge following the announcement of its fourth-quarter financial results. The company reported a net profit attributable to shareholders of 8.56 billion Swedish kronor, significantly exceeding the 6.61 billion kronor anticipated by analysts.
In addition to robust earnings, Ericsson detailed plans to return substantial value to its shareholders. This includes a proposed share buyback program valued at approximately 15 billion Swedish kronor and an increased dividend for 2025, set at 3 kronor per share, up from 2.85 kronor.
The company's core networks business demonstrated resilience, posting a 4% organic sales growth in the fourth quarter. Despite varied regional performance, with declines in Latin America and parts of Asia offset by growth in the Middle East, Africa, and Vietnam, the adjusted gross margin within this unit remained strong.
Looking ahead, Ericsson identified the defense sector as a key growth area, especially with rising U.S. and European military budgets. The company foresees considerable opportunities for its technology in defense applications, including drone detection, and plans to increase investments in this segment by 2026.
