The company's quarterly adjusted operating earnings fell to 7.1 billion Swedish crowns from 8.8 billion crowns a year earlier.Ericsson's quarterly revenue, however, rose to 68 billion crowns from 56.3 billion a year earlier, beating analysts' average estimate of 66.25 billion.
Gross margin fell to 41.4% from 44% as it was also hit by lower royalty revenue due to ongoing patent disputes. Footprint gains with large-scale projects in early stages tend to have a dilutive impact on gross margins, Chief Executive Borje Ekholm said in a statement. Apart from supply chain disruptions due to the Russia-Ukraine war and chip shortages, the company has been facing investigations over bribery in Iraq and investor ire over improper disclosure.
The company is being investigated by the US Department of Justice and Securities and Exchange Commission over its past conduct in Iraq.