The stock market is in a good mood. Ericsson is up 8 percent after just over an hour of trading.
5G deals are going well, margins are moving in the right direction and demand for critical networks, i.e. for the blue-light and defense sectors, is increasing.
"We have had a serious currency headwind. If you adjust for that, organic growth in the last quarter was six percent," Börje Ekholm says.
AI increases demand
The giant dividend - around 10 billion in pure dividends and 15 billion including share buybacks - is justified by the Ericsson boss with a “too strong” balance sheet. There will be money left over after deducting the approximately 50 billion that will go to investments in research and development and what is needed for “additional acquisitions”, according to Ekholm.
The fact that Ericsson is simultaneously announcing that just over 10 percent of its employees in Sweden will be laid off, approximately 1,600 positions, is about being able to accelerate and brake at the same time, according to the Ericsson boss.
"It can be difficult to understand," he says.
Union negotiations have begun and it will be a few months before the employees directly affected can be notified.
Ekholm now sees AI moving into applications and equipment, which is expected to lead to more demand for “programmable, autonomous networks” from both commercial and public-sector actors.
“We must coexist”
Ericsson helped finance Donald Trump's inauguration as US president a year ago. And at the World Economic Forum in Davos this week, Ekholm warned the EU against overreacting to Trump's threats in the Greenland crisis. He also declared the death of the idea that the EU could free itself from dependence on American technology.
"There are no conditions for that. Data centers, semiconductor technology, basically all digital technology - except advanced connectivity - is actually from the US. So we have to coexist and then we have to work on it," he tells TT.
When asked if he expects to be able to celebrate his tenth anniversary as Ericsson's CEO early next year, he answers:
"Only time will tell. But you know, this is the most exciting company in the world. And we are actually in incredibly exciting times."
Ericsson reports an adjusted operating profit of SEK 12.7 billion for the fourth quarter of 2025. This compares with SEK 10.2 billion in the corresponding quarter a year earlier.
This was better than the average forecast among analysts of SEK 10.4 billion, according to Bloomberg's compilation.
In its financial statements, Ericsson proposes a dividend to its owners of SEK 3 per share (just over SEK 10 billion), up from SEK 2.85 a year earlier. The market's expectations were SEK 3.76.
But the board also proposes a buyback program on top of this, which gives the owners 15 billion SEK.
The large buyback program and unexpectedly strong results lifted Ericsson's shares by almost 9 percent in morning trading on the Stockholm Stock Exchange. However, the shares are down 4.6 percent in one year.
