Smartphones boost SE 3Q profits

Sony Ericsson turned a profit for the third consecutive quarter, as sales of Android smartphones helped stabilize the business during 3Q10.
Profit of €49 million during the quarter overturned a loss of €164 million in the same period in 2009, as the firm’s focus on smartphones helped it maintain revenues at €1.6 billion – broadly flat with 3Q09.
Sony Ericsson achieved the figures despite a year-on-year drop of almost four million in its overall device shipments during the quarter. The firm estimates the 10.4 million units sold during 3Q10 gave it a 4% share of the global handset market.
Chief Bert Nordberg said the results show the firm’s performance is stabilizing, noting that it’s “strategy to focus on the smartphone segment is succeeding.”
However, he admitted the firm failed to meet its own device shipment targets during 3Q10, blaming component shortages for the shortfall, the Times of India reported.
While Nordberg said the firm will evaluate Microsoft’s Windows Phone 7 operating system, he reiterated the vendor’s commitment to becoming the world’s leading Android handset maker.
Despite the firm’s high-end focus, its average selling price fell 4% quarter-on-quarter to €154 as it added more mid-tier units during the period.
Gross margin doubled to 30% year-on-year, however operating margins remain tight at 4%.
While the firm lauds its return to profitability, Bloomberg said the figure was around €10 million shy of analyst’s forecasts.
Sales were also lower than forecast, with analysts predicting €1.8 billion for the quarter, Reuters reported.