While some Americans are stockpiling beans, flour and olive oil in anticipation of tariffs, companies are also bulking up on what they need, and Ericsson appears to have benefited from that trend in the first quarter of 2025.

The Swedish networking and telecommunications company $(ERIC)$ on Tuesday reported first-quarter net income of 4.21 billion Swedish kronor ($428 million), up sharply from 2.61 billion kronor a year ago. Net sales were up 3% over the year-ago period to $55 billion.

Shares of Ericsson jumped over 8% after earnings beat.

Analysts surveyed by Visible Alpha were forecasting net income of 2.2 billion kronor, with sales in line with expectations. Another gauge of profitability, adjusted gross margin, jumped to 48.5% from 42.7%.

Analysts pointed directly at networking sales in the Americas and tariff stockpiling for the profit boost at Ericsson. The company reported a 3% rise in those sales, citing growth in the Americas that offset lower sales in other market areas, such as cloud software and services sales, which fell by 3%, and sales in segment enterprise, which dropped 7%.

Gross margin for the networks business surged in the first quarter to 50.8% from 44% a year ago. "A key part of the very strong margin seems to have been the strength in the U.S. business which is high margin," a team of J.P. Morgan analysts led by Sandeep Deshpande wrote in a note to clients.

"The strength in the U.S. was at least partially driven by customers buying product in anticipation of tariffs," said the analyst, who added a caveat. "With tariffs now in place but not substantially impacting Ericsson's business yet, there may be risk of weaker U.S. sales in [the second quarter] or beyond and this could have implication for future margin in networks."

That means investors - who pushed Ericsson's U.S.-listed shares up over 6% in reaction to the results - will need to be watching closely in coming quarters for any reversal on that stockpiling from U.S. clients in particular. J.P. Morgan has a neutral rating on Ericsson.

Börje Ekholm, president and CEO of Ericsson, said the company was "confident of our strong position in mobile networks and [expects] enterprise to stabilize during 2025."

While the company forecast networks and cloud software and services sales to be "broadly similar to average three-year seasonality" in the second quarter, executives on the company's earnings call stressed the difficulty of predictions given currency volatility and tariffs that could change at anytime.

While Ericsson has diversified and invested in expanding production across North and South America, Europe and Asia, Ekholm said on the call that the company probably needs to be "a bit more active" in building a "Western ecosystem in those components."