Ericsson has shown resilient profitability but the environment is increasingly challenging, J.P. Morgan analysts write. Profitability has been driven by better operating efficiency and a model less prone to changes in regional mix, coupled with restructuring actions, the bank says. However, semiconductor and other component costs are increasing and could make it more challenging for Ericsson. The company has indicated that cost pressures are being managed through a mix of burden-sharing and supply-chain initiatives, but customer price increases are challenging in a subdued market. The risk is that operational efficiencies might not be enough to offset pricing pressures, it adds. U.S. mobile investments remain weak, likely because most of the U.S. 5G rollout is complete, but Europe and India could drive some growth. Shares in the Swedish telecommunications-equipment maker rise 0.6%. (dominic.chopping@wsj.com)