Sony Ericsson says earnings fall in Q4

Mobile phone maker Sony Ericsson's fourth-quarter profit fell nearly 17% as higher costs and taxes more than offset the impact of higher shipments, an Associated Press report said.

The Associated Press report quoted the company as saying that it earned 373 million euros ($555 million) in the last three months of 2007, down from 447 million euros ($699.5 million) a year earlier.

Sales remained almost unchanged at 3.77 billion euros ($5.61 billion) compared with 3.78 billion euros ($5.5 billlion) in the fourth quarter in 2006, the report said.

Sony Ericsson said the number of shipped units rose about 18% in the quarter, but operating costs increased 16.2% to 724 million euros ($1.8 billion) from 623 million euros ($923 million) a year ago.

The company added however that it gained market share in the quarter thanks to demand for its higher-end phones, including the K550 Cyber-shot, the W200, W300 and W580 Walkman phones in the Americas and Europe.

Jari Honko, an analyst at eQ Bank, said the company posted a higher-than-expected pretax profit and gross margin, which rose to 31.8% from 29%.

'The gross margin was surprisingly good, driving the profitability,' the analyst, quoted by the report, said.

The Associated Press report also quoted analyst Martin Garner of Ovum in London, as saying that the results were healthy.

Volumes were 'a bit disappointing,' he said, with Sony Ericsson not profiting as much as rivals like Nokia on winning some of the market share that Motorola lost last year.

For the full year, net income rose 12% to 1.1 billion euros ($1.6 billion), up from 997 million euros in 2006, the report said.