Ericsson's first quarter is just about two weeks old, but the finalisation of its standardised 

earnings report may be rushed more than ever.On 11 April, the US government, concerned 

about the potential impact of tariffs on a wide range of electronic components used by 

Ericsson and other equipment makers, decided to exclude them from the tariffs. Ericsson said 

this limited the impact of the U.S. tariffs on its gross margin to less than one percentage point 

in the current quarter. At current exchange rates, that equates to about $56.5 million in the first 

quarter of this year.

‘This is based on where we were on Friday,’ Ericsson's CFO Lars Sandström said in response 

to an analyst's question today about the impact on suppliers in Sweden, ‘and as you know, 

there will be new information coming out, and we will have to pay attention to how that will 

affect us, but we just want to give our best estimate of where we are at the moment.’

The update coincided with Ericsson's announcement of its first quarter results, which apparently 

pleased analysts and led to a 9 per cent rise in its share price at the opening of the Stockholm 

stock market today. In a market where Ericsson sells flat 5G products, reported revenues of 

SEK55bn ($5.6bn) were unchanged at constant exchange rates from the same period last year. 

But Ericsson's gross margin soared 5.7 percentage points to 48.2 per cent, and its net profit 

soared 61 per cent to SEK4.2 billion ($430 million). After the recent turmoil, the share price recovery 

almost brought Ericsson back to the level it was at on the eve of Emancipation Day (2 April), when 

US President Donald Trump started firing tariffs at other countries.

Of course, things have changed a lot since then. The basic tariff rate seems to have fallen to 10 percent for almost all countries except China, which faces heavy tariffs of up to 145 per cent. And 

the exemptions on those components may not last. Over the weekend, Trump said on social media 

that there would be no ‘exceptions’ and that semiconductors and other electronics would eventually 

be put into a separate tariff category. If that happens, the impact on Ericsson could be much more than 

a percentage point of its gross margin.