Ericsson Stock Sinks on Warning US Tariffs Would Significantly Hurt Business

Earnings Performance - The company reported Q4 EPS of 1.44 Swedish kronor ($0.13), significantly below the expected SEK2.07 ($0.19) [3] - Revenue increased by 1% YoY to SEK72.91 billion ($6.68 billion), mostly in line with forecasts [3] Regional Sales Performance - North America sales surged 53% to SEK22.0 billion due to contract wins, increased network investments, strong year-end software demand, and timing of project deliverables [4] - Sales in Europe and Latin America increased by 1% [4] - Sales declined in Southeast Asia, Oceania, and India (-28%), Northeast Asia (-22%), and Middle East and Africa (-19%) [4] Expenses and Investments - Research and Development (R&D) expenses increased by SEK13.9 billion [5] - Selling & Administrative expenses rose by SEK10.5 billion [5] Market Reaction and Tariff Concerns - American depositary receipts (ADRs) of the company dropped 11% following the earnings miss and tariff warnings [1][6] - The company warned that potential tariffs from the Trump administration could significantly impact its future results, particularly affecting international product development and global value and supply chains [2] - The company also highlighted uncertainties in the future bilateral trading relationship between China and several countries, including Sweden [2] Stock Performance - Despite the recent drop, Ericsson ADRs have gained approximately 40% over the past year [5]