Why Ericsson’s Stock Is Climbing Over 12% Premarket Today

Swedish telecom company Home Telefonaktiebolaget LM Ericsson’s (ERIC) Nasdaq-listed ADRs are poised to open Tuesday’s session sharply higher, with the stock rising over 12% in the early premarket session following the company’s quarterly results.

Ericsson’s ADR has added merely 3.80% for the year-to-date period, underperforming the broader market, as represented by the S&P 500 Index. On Stocktwits, retail sentiment toward the stock improved to ‘extremely bullish’ as of early Tuesday, and the message volume on the stream was at ‘high’ levels.

The earnings report for the third quarter of the fiscal year 2025 showed adjusted earnings before interest, taxes, and amortization (EBITA) — called core earnings —of 15.8 billion Swedish Kronor ($1.67 billion). This marked a sharp rise from the year-ago’s 7.8 billion Kronor. The jump came after the company sold its call routing business iconective, which yielded a one-time capital gain of 7.6 billion Kronor. Adjusted EBITA margin improved to 28.1% from 12.6%.

Net sales, however, slipped 4% year-over-year to 56.2 billion Kronor. On an organic basis, sales remained flat. CEO Börje Ekholm said, ”In Q3, we established margins at a new long-term level following strong operational execution over the past few years,” adding that Cloud Software and Services sales grew 9% on an adjusted basis, driven by strong growth in core networks.

Looking ahead, Ericsson expects Enterprise organic sales to stabilize in the fourth quarter and the Radio Access Network (RAN) market to remain broadly stable. That said, it warned that increased uncertainty remained, both in terms of potential for further tariff changes as well as in the broader macroeconomic environment. The company hinted at increased shareholder distribution, citing solid recurring cash flow and a strong cash position at the end of the third quarter following the iconectiv sale.

Separately, Ericsson announced a five-year strategic partnership to modernize Vodafone’s network footprint using Ericsson’s high-performing programmable network solutions across several key markets.

($1 = 9.50 Swedish Kronor)

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