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(Sharecast News) - Shares in Ericsson jumped on Friday, after quarterly earnings at the telecoms equipment manufacturer beat expectations.
The Swedish company also confirmed plans to return more than 1bn to investors in its first ever share buyback.
As at 1045 GMT, the Stockholm-listed stock was trading up 9%, having pared back slightly on earlier gains.
Sales fell 5% in the fourth quarter to SEK69.3bn (5.7bn), but rose 6% on an organic basis, which strips out currency fluctuations. Analysts had been expecting sales closer to SEK66.6bn.
In the year to December end, sales were 2% higher on the same basis, at SEK236.7bn. The increase was driven by growth in networks and cloud software and services as well as robust demand in Europe, the Middle East and Africa and south east Asia. Americas was "broadly stable", Ericsson said.
Adjusted fourth-quarter earnings before interest and tax came in at SEK12.3bn, a 28% hike on the previous year and comfortably ahead of forecasts for SEK10.1bn. Over the full year, adjusted EBIT came in at SEK41bn.
Borje Ekholm, chief executive, said: "Our fourth-quarter results demonstrate solid execution of our strategy priorities. It is encouraging that we delivered organic growth in a flattish RAN [radio access networks] market environment, through our efforts in mission critical networks, 5G core and enterprise.
"For 2026, we expect the RAN market to be flat. Mission critical and enterprise markets, where we are well positioned, are expected to grow.
"In this environment, we plan to increase investments in defence during 2026 while continuing to optimise our cost base to support margins and cash flow generation."
The infrastructure used in radio access networks is critical to mobile phone usage.
The group, which is proposing a final SEK3 dividend per share, also unveiled plans to return SEK15bn to shareholders through a share buyback programme, which is due to start in the current first quarter.
Ericsson noted: "Adjusted for the proposed shareholder distributions, the next cash position at year end 2025 remains at a solid level when considering future investments to maintain technology leadership."