Sony Ericsson turns profit in 1Q
Sony Ericsson returned to profitability in 1Q10, despite reporting a 28% drop in handset sales year-on-year.
The firm said shipments of 10.5 million devices generated €1.4 billion in sales during the quarter, down 19% on 1Q09, but were sufficient to overturn a €293 million net loss in 1Q09 with a net profit of €21 million in 1Q10.
It blamed the lower handset sales on changes to its portfolio, and in particular a shift towards high-end devices. That shift helped it grow its average selling price 12% to €134.
President Bert Nordberg said the figures are the result of a cost reduction programme, along with the “positive impact” of new products, such as the Xperia X10, the vendor’s first Android-based device.
“Increases in both gross and operating margins show that we are on the right track,” Nordberg said.
Gross margin was 31% in 1Q10 compared to 8% in 1Q09, while operating margin hit 1% compared with -21% in 1Q09.
The firm has also appointed Sony stalwart William Glaser as its new CFO, replacing Ulf Lilja.