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Ericsson shares fall after earnings show margin pressure from component costs

The telecom-equipment maker said higher component costs, tied to a surge in memory-chip prices, weighed on margins.

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Ericsson shares dropped after the company reported earnings that pointed to margin pressure from rising input costs, with MarketWatch noting the move represented the worst reaction to earnings in nearly three years.

According to MarketWatch, Ericsson attributed the deterioration to higher component costs, and pointed to a likely link with a sharp spike in memory-chip prices that boosted costs at the same time revenue and margins were under pressure.

The report said the cost headwind was significant enough to outweigh investors’ expectations for that quarter, contributing to the steep selloff in the stock after results were released.

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