Jan 23 (Reuters) - Swedish telecoms gear maker Ericsson said it planned to return 15 billion Swedish crowns ($1.7 billion) to investors through its first share buyback programme ever, after it trounced quarterly earnings expectations on Friday.
Shares of the company rose more than 11% in early Stockholm trading, leading gains on Europe's benchmark STOXX 600 index.
The company reported adjusted earnings before interest and taxes, excluding restructuring charges, of 12.26 billion crowns for the final quarter of 2025, above the 10.09 billion crown average forecast in an Infront poll of analysts.
Ericsson, one of the two Western suppliers of network equipment alongside Nokia, moved quickly to adjust to U.S. import tariffs last year and has kept up a deep restructuring programme to counter weaker 5G investments.
The Swedish group said earlier this month it would cut 1,600 jobs at home to lift efficiency.
The proposed share repurchases are expected to begin after the publication of the first-quarter report and run until 2027, it said.
Ericsson also lifted its annual dividend payout to 3 crowns per share from 2.85 crowns last year.
The decision to launch a share buyback follows a sharp improvement in Ericsson's cash position, as it benefitted from cost cuts and the sale of its U.S.-based Iconectiv business.
The group's net sales in the fourth quarter were 69.3 billion crowns, beating analysts' 66.6 billion crown estimate, as business in Europe, the Middle East and Africa grew, while North America remained stable.
Ericsson and Nokia could regain ground in Europe after the European Commission proposed phasing out high-risk suppliers in critical sectors.
In a Reuters interview, Ericsson's finance head Lars Sandström said it was "a bit early to say" how much the EU proposals will change the market share, as these initiatives usually take time.
"If that comes into place, then of course we are ready to take that opportunity," Sandström said.
($1 = 9.0026 Swedish crowns)
(Reporting by Gianluca Lo Nostro and Agnieszka Olenska in Gdansk; Editing by Milla Nissi-Prussak)
