Ericsson reported somewhat positive first-quarter operating results bolstered by continued growth in North America, but management also warned of potential uncertainty for the rest of the year tied to the ongoing tariff turmoil and the potential for more internal cost cutting.

Ericsson’s overall results showed a modest year-over-year increase in revenues, which CFO Lars Sandström said was backed by continued growth in North America. That growth also helped to power a more significant 61% surge in net income for Q1, that came in ahead of expectations.

CEO Börje Ekholm also threw out that Ericsson’s beleaguered cloud, software, and services business has its “first positive, first quarter ever.” Ericsson had previously altered its cloud and software focus toward more profitable outcomes.

Despite the positive quarter, Ericsson management did note that overall uncertainty could require the vendor to make further internal operating adjustments.

Elkholm repeatedly touted the vendor’s already implemented cost management moves, which included plans announced last year to cut 1,200 jobs in Sweden. The company at that time said those cuts were part of its broader goal to bolster its beleaguered financial position, which it expects to be put under further near-term pressure due to “volume contraction as customers remain cautious.”

Those cuts also followed reports that the vendor had cut around 1,400 jobs in its home country the previous year.

“We live in a flat [radio access network] market, and together with an inflationary market that will require cost reductions to offset this part. That is what we are working against,” Sandström said. “How it will exactly pan out is, of course, I cannot give you full guidance, but that is what we are working toward.”

Ericsson does remain one of the world’s two largest telecommunication equipment vendor, with its overall place tied to the inclusion or exclusion of sales in China. But, that overall market continues to stagnate, with some analysts expecting growth to actually drop slightly over the next several years.

Ericsson warns on tariffs Current uncertainty over tariffs is also clouding long-term prognostications. Ericsson’s management echoed exasperated comments from other tech leaders in attempting to forecast an operational impact, which it was currently limiting to around a 1% hit to its bottom line.

“The current macro-economic turmoil and tariffs are impacting our industry, and we will not be immune,” Ekholm said. “We've taken actions over the many years to actually build resilience into our supply chain, including how and where we develop and manufacture our products, so our focus remains on controlling what we actually can control, including, of course, pricing and spending and the actions we've taken.”

Ericsson’s management was further questioned on those actions, including its ability to potentially tap into a more diverse manufacturing ecosystem. Ericsson does have some manufacturing facilities in the United States, but Sandström noted that a reliance on a manufacturing shift would be challenging.

“When it comes to production, we have U.S. production sites where we can produce,” Sandström said. “We don't give exact numbers on how much is coming from where. And … we have production in the U.S., South America, and Europe, and part of Asia, and we can shift volumes between sites. But it's not a quick change, of course, … we don't do any big changes now because we don't know actually where we land. So we will see here in the coming months if we choose to ramp up, ramp down between different sites, but it's very depending on where the tariffs actually land at the end of the day.”

Ekholm added that the actual manufacturing of equipment is also less of an issue than the current component supply chain. “Those are the flows we need to work on, and we need to create, I call it, the Western ecosystem in this and that’s going to take some time,” Ekholm said.