Sony Ericsson profits slide

Sony Ericsson pre-tax profits for the first quarter of the year are down 27 million euros compared to same quarter last year.

The Swedish-Japanese company recorded pre-tax profits of 70 million euros. Sony Ericsson’s profits for the same period last year were in the region of 100 million euros.

Sales figures are also down. During the first quarter last year Sony Ericsson made 1,338 million euros but that figure has dropped to 1,238 million euros for the first quarter of 2005.

The company blames an overall downturn in the mobile-phone market for its change in fortunes.

The decline can also be attributed to the lack of new Sony Ericsson products on the market during the first quarter of 2004.

“The product line-up was mature and few new products were launched during

the period,” Sony Ericsson said.

But this had since been fixed, the company said, and new third-generation (UMTS) phones, high-resolution camera phones and a music phone were to roll out during the second and third quarters of the year.

Equity market investors still felt the company should have done better in the first quarter and sold shares in the joint venture’s Swedish parent company, Ericsson, in early Stockholm trading.

Ericsson’s share price fell 2.9% from Thursday to 20.30 kronor.


Ericsson profits double on sale of Sony stake

The Swedish telecommunications equipment maker Ericsson posted Wednesday a first quarter net profit that was more than double the level recorded a year earlier, owing to a major one-off divestment.

Ericsson profits double on sale of Sony stake

The world leader in mobile telephone networks also said sales had fallen by four percent to 50.97 billion kronor ($7.6 billion), while operating profit excluding the sale of its half the joint venture Sony Ericsson was 56 percent lower at 2.8 billion.

Net profit leapt however by 116 percent to 8.8 billion kronor thanks to a 7.7 billion kronor contribution from the sale of a 50-percent stake in Sony Ericsson, a statement said.

Meanwhile, “sales of high-performance mobile broadband developed well in North America, Japan and Korea, while other regions such as Europe including Russia, parts of Middle East and India were weaker,” chief executive Hans Vestberg said.

Cheuvreux analyst Odon De Laporte highlighted an increase in Ericsson’s gross margin since the fourth quarter of 2011.

Gross margin is the percent of total sales that a company retains after taking into account the cost of their production and associated services.

“Sure, the report shows there is low activity, especially for the network division, but seeing the gross margin bouncing back is definitely a relief,” Laporte was quoted by Dow Jones Newswires as saying.

Ericsson’s gross margin climbed to 33.3 percent in the first three months of the year, from 30.2 percent in the fourth quarter of 2011, but remained below the 2011 first quarter level of 38.5 percent.

On February 16, Sony said it had finalised the acquisition of Ericsson’s share of their mobile telephone joint venture Sony Ericsson, which was renamed Sony Mobile Communications.

The transaction, which had a total value of 1.05 billion euros, included patents and licenses.