Sony Ericsson posts fourth straight quarterly loss

Sony Ericsson has posted its fourth straight quarterly loss, slimmer than expected but still reflecting a significant downturn in sales compared to last year’s performance.

The manufacturer shipped just 13.8 million handsets in the second quarter, down 43% from a year ago and 5% below Q1 shipments. Gross margin was 12%, well below the 23% margin achieved a year ago but up from 8% in the first quarter.

The net loss of Euro 213 million compared with a slight Euro 6 million profit a year earlier, with sales sinking 40% to Euro 1.68 billion. The average selling price (ASP) rose to Euro 122 from Euro 120 in the first quarter and Euro 116 a year earlier.

President Dick Komiyama described the second quarter as “challenging” and warned that the remainder of the year would be difficult.

“Our focus remains on bringing the company back to profitability and growth as quickly as possible, and our performance is starting to improve due to our cost reduction activities. The new product portfolio that integrates communications, entertainment and social media applications should contribute to healthier topline development when shipments start later this year,” Komiyama added.

Sony Ericsson maintained its forecast that the global handset market this year would contract by at least 10% from around 1,190 million units in 2008. It estimates that its market share was over 5% in the second quarter.

The company said its 12-month-old rationalization program, which aimed to cut operating expenses by Euro 880 million, was on track. The full benefit was not expected until the second half of 2010, however. Since the cost-cutting began, the global workforce has been reduced by 2,350 people. Some 4,000 jobs are expected to be cut.

 

Suggested Articles

Wireless operators can provide 5G services with spectrum bands both above and below 6 GHz—but that doesn't mean that all countries will let them.

Here are the stories we’re tracking today.

The 5G Mobile Network Architecture research project will implement two 5G use cases in real-world test beds.