LM Ericsson Telephone's stock plummeted 5.88% during intraday trading on Friday, following the release of its first-quarter 2026 financial results that fell short of market expectations.

The Swedish telecommunications equipment maker reported quarterly earnings of $0.03 per share, missing the analyst consensus estimate of $0.13. Sales of $5.397 billion also lagged behind expectations of $5.720 billion. In Swedish krona terms, net sales declined 10% year-over-year to SEK 49.33 billion, while adjusted EBITA dropped 20% to SEK 5.56 billion.

Company executives cited multiple headwinds including rising semiconductor costs driven partly by artificial intelligence demand, a sales slowdown in North America, and unfavorable currency impacts. CEO Börje Ekholm stated, "We are facing increasing input costs, especially in semiconductors, caused in part by AI demand." The company also noted that global telecom equipment demand remains weak, adding pressure to profitability despite organic sales growth in some regions.