Gross margin falls to 42.1 from 43.4
Core earnings 7.3 bln crowns vs forecast 8.01 bln crowns
CEO says to increase prices
Shares fall 11

STOCKHOLM, July 14 Reuters Ericsson, the Swedish telecoms equipment firm facing bribery investigations, reported a rise in secondquarter core earnings on Thursday that missed expectations as margins were hit by higher component and logistics costs.

Shares of the company dropped 11 in morning trading to their lowest since March 2020. The stock has lost about a third of its value since February, when Ericsson disclosed improper payments in Iraq stretching back to at least 2011.

Rising inflation, a chip shortage and Russia39;s invasion of Ukraine drove up costs and pushed down the firm39;s gross margin to 42.1 from 43.4 a year earlier.

It was also hit by patent disputes, including with Apple, that cut its highmargin royalty revenue by 900 million Swedish crowns 85 million.

The global supply chain situation remains challenging … this results in cost increases which we work hard to mitigate as far as possible, Chief Executive Borje Ekholm said in a statement. As contracts expire, we aim to adjust pricing.

Analysts expect the trend of higher costs to continue in the second half of the year.

Apart from increasing prices, Ericsson is investing in research to lower the cost of products to fight of inflation, Ekholm said in a conference call.

The company is being investigated by the U.S. Department of Justice DOJ and Securities and…