Sony Ericsson maintains profit in 2Q
Sony Ericsson continued along the road to recovery during 2Q10, reporting its second consecutive profit as rising ASPs offset lower unit shipments during the period.
The firm overturned a net loss of €213 million in 2Q09 with a profit of €12 million in 2Q10, as sales grew from €1.6 billion to €1.7 billion in the most-recent quarter.
Higher ASPs of €160 contributed to the increased sales figure, offsetting a 2.8 million drop in unit shipments to 11 million year-on-year.
President Bert Nordberg said shipments were lower because the firm had reduced its portfolio of devices, but said its focus on so-called “value” devices and the popularity of new smartphone models was paying off, leaving the vendor “well positioned for long term growth.”
Operating margins hit 2% in 2Q10, up 1% sequentially and a significant improvement on the 16% loss recorded in 2Q09, as a cost-reduction program started in 2008 begins to bear fruit.
Nordberg said the scheme is on-track to cut operating expenses by €880 million by end-2010.
Analysts took solace in the fact the firm reported its second consecutive net profit, despite the fact the figure fell well short of the €50 million many had forecast, WSJ.com reports.
Sony Ericsson estimates its market share in 2Q was flat compared to 1Q, at around 4%, and the firm stuck by its forecast of modest growth in the global handset market through 2010.
Analysts predict global device sales will grow 11.6% year-on-year in 2010, Reuters reports.