Sony Ericsson posted a large loss for the first quarter amid weakening demand, as expected, and said it would cut 2,000 more jobs in a bid to return to profitability.
The joint venture between Japan's Sony and Sweden's Ericsson reported a net loss for the quarter of $386 million, down from a profit of $173.6 million in the year-ago period. Sales tumbled 36 percent to $2.22 billion, from $3.53 billion in the year-ago period. Sony Ericsson's pre-tax loss of $483.1 million was in line with what it predicted in a profit warning in March.
The company shipped 14.5 million units, down 35 percent from the first quarter of 2008. The average selling price for Sony Ericsson's phones fell slightly to $156.69, down from $158 in the fourth quarter. However, the company did see some signs of a course correction.
"In March there were signs of stabilization ... in the U.S. and in Europe," CEO Hideki Komiyama told Reuters in an interview. "Still, in some areas we still have weakness, in Eastern Europe, in Russia, the Middle East and India, but some other areas have clearly started seeing some signs of correction."
The joint venture's market share fell by about 2 percent to 6 percent. The company said it expects the global handset market to contract in 2009 by "at least 10 percent." Market leader Nokia predicted a 10-percent contraction when it reported earnings yesterday. Shares in Sony Ericsson rose 2.2 percent to $9.37 in morning trading in Stockholm.
Sony Ericsson said it expects the new round of job cuts, after cutting a similar amount in 2008, to cost the company around $261 million, but that it hopes the move will cut operating expenses by $522 million by mid-2010.
For more:
- see this WSJ article (sub. req.)
- see this Reuters article
- see this article
- see the company's release
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