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Record profits for Sony Ericsson

Mobile phone maker Sony Ericsson has released results showing it enjoyed a record year in 2005, thanks largely to the success of its new Walkman phone range.

Pre-tax profits at the Swedish-Japanese company were €514 million for 2005, compared with €486 million the year before.

The company said much of the growth was due to a particularly successful second half. It said in a statement that overall worldwide sales of mobile phones grew during 2005, and that its growth was in line with the market.

“This was another solid quarter for Sony Ericsson, and has enabled us to finish the year with great momentum,” said Miles Flint, Sony Ericsson’s president.

Shipments of Sony Ericsson cell phones reached 16.1 million units in the last quarter, compared to 12.6 million in the same period last year and 13.8 million in the third quarter. Over the whole year the company shipped 51.2 million units, up from 42.3 million last year.

Much of the success in the past six months has been due to the launch of new phone models with cameras and MP3 players. The company said that its Walkman branded phones had been particularly successful.

SONY

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.

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