By Dominic Chopping

STOCKHOLM--Sweden's Ericsson is due to report fourth-quarter earnings on Friday. Here is what you need to know:

NET PROFIT: The telecom-equipment maker is expected to post a net profit of 6.61 billion Swedish kronor ($725.8 million), according to a consensus provided by FactSet, compared with 4.78 billion kronor in the same period a year prior.

SALES: A FactSet forecast expects sales to fall 8.6% to 66.65 billion kronor from 72.91 billion kronor a year earlier. The weaker U.S. dollar is expected to be a major headwind to sales, with a 5.5% year-on-year impact, JPMorgan analysts say.

The stock is down around 9% over the last 12 months and trades at 86.72 kronor on Thursday.

WHAT TO WATCH:

--Ericsson guided for a fourth-quarter adjusted gross margin in the networks unit in the range of 49% to 51%. In the third quarter, the company reported a strong group adjusted gross margin at 48.1%, mainly driven by tight cost control and better product mix. Despite that, UBS analyst Francois-Xavier Bouvignies expects a weaker fourth quarter gross margin of 47.2%. "Gross margins in the upcoming quarters will be crucial in evaluating the durability of current margin levels."

--Ericsson is sharpening the focus of its networks business on markets like the U.S., India and Japan where Chinese competition is limited, while at the same time de-emphasizing some markets like Latin America. The company expects sequential fourth-quarter network sales growth to be broadly similar to three-year average seasonality of 16%.

--Investors will focus on the company's cash return program that is likely to be announced, JPMorgan analysts say. The bank said that if a buyback is announced, it could be as much as around 10% of market capitalization. "However, it is not clear if the company will announce a one-off share buyback or special dividend or if they will announce an ongoing share buyback program - the latter would be taken positively by investors."

Write to Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

January 22, 2026 07:40 ET (12:40 GMT)

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