Sony Ericsson posts Q4 loss ahead of ownership switch

Sony Ericsson reported a surprise net loss for the fourth quarter, as the company faced intense competition and weaker macroeconomic conditions. The drop came against the backdrop of Sony's purchase of Ericsson's (NASDAQ:ERIC) share in the joint venture, which is expected to be completed in the coming weeks.

In the fourth quarter, Sony Ericsson reported a net loss of $267 million, down from a profit of $10.3 million in the year-ago period, and weaker than an average forecast of $54 million profit, according to Reuters. Sales dropped to $1.66 billion, down from $1.97 billion in the fourth quarter of 2010. Overall handset unit shipments slumped to 9 million, down from 11.2 million in the year-ago quarter, although the company's average selling price climbed to around $184 from $175.

"Our fourth quarter results reflected intense competition, unfavorable macroeconomic conditions and the effects" of flooding in Thailand, which disrupted production, Sony Ericsson CEO Bert Nordberg said in a statement. He said Sony Ericsson will continue to focus on expanding its lineup of Xperia-branded smartphones running Google's (NASDAQ:GOOG) Android platform in 2012, and said the company expects overall growth in the smartphone market to be strong this year.

Sony Ericsson is the first handset maker to officially report fourth-quarter results. However, Samsung has said it expects a record quarter in terms of smartphone sales, but HTC and Motorola Mobility (NYSE:MMI) have warned of weaker-than-expected sales for the quarter.

Sony Ericsson said Sony's acquisition of Ericsson's stake is expected to close in late January or February. After that time, Sony Ericsson will become a wholly-owned subsidiary of Sony and will be called Sony Mobile Communications. Sony Ericsson executives have said they expect that tighter integration with Sony will benefit the firm by allowing it to deliver muisc and video content across multiple screens.

For more:
- see this release
- see this WSJ article (sub. req.)
- see this Reuters article

Related Articles:
Sony Ericsson to release more gaming phones, integrate tighter with Sony
Sony to pay Ericsson $1.47B for its 50% stake in Sony Ericsson
Sony exec sees Sony Ericsson as critical to product plans
Sony Ericsson posts Q3 profit, warns of European slowdown

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