- Ericsson reported a 7% increase in sales, but a 36% decline in Q3 adjusted operating profit stood out to long-time industry analyst Sid Nag
- Business Area Enterprise Wireless Solutions (BEWS) is being integrated into other parts of the business
- Åsa Tamsons, head of BEWS, will leave her position on December 31
Ericsson reported a 7% increase in its Q3 sales driven by higher sales in Networks, but CEO Per Narvinger said a flat RAN market, high component costs and geopolitical uncertainty will challenge gross margins next year.
Despite the headwinds, Ericsson said it is “executing well in a challenging environment” and that customer demand remains “solid.”
Separately, the company announced organizational changes which will see its Business Area Enterprise Wireless Solutions (BEWS) division divided up and absorbed into other areas of the business.
Åsa Tamsons, head of BEWS, will aid in the transition and then depart on December 31.
Ericsson Q3 2026 by the numbers
- Reported sales were SEK 59.5 billion or $5.98 billion
- Organic sales increased by 7% YoY primarily driven by higher sales in Networks
- Organic sales grew in three out of four market areas
- Net income was SEK 5.8 billion or $5.83 billion, down 49% YoY
A closer look at Ericsson’s Q3 2026
Taking a closer look at the Q3 2026 numbers, “Ericsson’s 7% organic sales growth should not be mistaken for a broad telecom recovery,” Sid Nag, founder, CEO and chief research officer of Tekonyx, told Fierce Network. “It’s warning of a flat RAN market and rising component costs points to continued pressure on growth and margins in 2027.”
One percentage that stood out to Nag is the vendor’s 36% decline in Q3 adjusted operating profit. “Also noteworthy is Enterprise sales fell 10 percent to 4.6 billion crowns. This is a reflection of their iconnectiv divestment,” he said.
Meanwhile, Narvinger’s geopolitical warning is an “implication that operators’ network investment decisions will increasingly hinge on supply security, vendor restrictions and national infrastructure priorities, potentially benefiting Ericsson in selected markets while making global demand more fragmented and unpredictable,” he said.
Business Area Enterprise Wireless portfolio changes
Ericsson said its organizational changes are intended to simplify the company’s operating structure and strengthen “customer focus and drive further efficiencies.”
As part of those changes, Ericsson’s BEWS portfolio will be “moved to the parts of Ericsson best positioned to scale each activity, capture synergies and to better leverage R&D capabilities.” Tamsons will depart at the end of the year, Ericsson said in the press release about the org changes.
Neutral Host solutions and Ericsson Private 5G will move into Business Area Networks which will consolidate areas working with indoor technology. Wireless WAN solutions will remain a standalone business and will be reporting to Yossi Cohen, head of Market Area Americas, said the release.
Asked whether Ericsson is setting its enterprise networking division up for a sale, Nag told Fierce, “Nokia provides an interesting precedent. It agreed this week to sell Enterprise Campus Edge to AURELIUS. My read is that portfolio rationalization is underway at Ericsson. Wireless WAN is the business to watch for a potential sale.”
“The restructuring points more clearly to dismantling the standalone enterprise wireless division than preparing the entire business for sale,” Nag said. “This suggests Ericsson is reassessing whether enterprise wireless warrants its own leadership and cost structure. Integrating Private 5G into Networks suggests continued strategic commitment, while keeping Wireless WAN separate preserves the option of a future divestment, although Ericsson has announced no sale process."
As part of the reorganization, Ericsson said the company’s North-East Asia and South-East Asia, Oceania and India market areas are combining to form Market Area Asia-Pacific (APAC), now led by Patrick Johansson.
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