US Stock Market Move | Q2 net profit fell 12% year-on-year, Telefonaktiebolaget LM Ericsson Sponsored ADR Class B (ERIC.US) opened down more than 11%.

On Tuesday, Telefonaktiebolaget LM Ericsson Sponsored ADR Class B (ERIC.US) opened with a sharp drop of over 11%, down 22% from its high point in early June, and is currently trading at $10.41. On the news front, Telefonaktiebolaget LM Ericsson Sponsored ADR Class B released its second-quarter financial report for 2026. Due to a decrease in patent licensing revenue, net sales for the quarter dropped by 6.1% year-on-year to 52.69 billion Swedish Krona (equivalent to $5.61 billion), below the market expectation of 53.61 billion Krona. However, the adjusted gross profit margin rose against the trend to 48.4%, exceeding the market estimate of 47.9%; adjusted EBITA was 6.9 billion Krona, higher than the consensus expectation of 6.71 billion Krona, and the adjusted EBITA profit margin of 13.1% also exceeded the expected 12.5%. Net profit fell by 12% year-on-year to 4.1 billion Krona. Outgoing CEO Brje Ekholm stated in a release: "The second-quarter performance fully demonstrates the strength of our product portfolio and rigorous execution." Looking ahead to the third quarter, Telefonaktiebolaget LM Ericsson Sponsored ADR Class B expects network business sales growth to be higher than the average seasonal pattern of the past three years, with an estimated adjusted gross profit margin range of 48% to 50%. Free cash flow before acquisitions this quarter dropped by 85% year-on-year to 400 million Krona, and the cash flow situation still needs to be monitored.