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Sony Ericsson profit soars

Mobile phone producer Sony Ericsson has recorded a profit before tax of 151 million euros for the year's first quarter - more than doubling the 70 million euros profit for the same period last year.

Turnover climbed to 1.99 billion euros, up from 1.29 billion euros in the first quarter of 2005.

The results bettered analysts’ expectations, with an average profit prediction of 135 million euros and a turnover of 1.87 billion euros, according to Reuters.

During the quarter, Sony Ericsson supplied 13.3 million mobile phones, compared to 9.4 million a year earlier.

“Our focus is staying where it is, which means that we are investing in camera mobiles, music mobiles and office mobiles,” said managing director Miles Flint in a webcast on Thursday morning.

“We have also spent a lot of time broadening our portfolio. Not least so we are there when consumers in expanding markets are now ready to change their mobiles with black and white screens to colour screens and simpler camera mobiles.”

This 41% increase was a result of faster growth in the market in general, said Sony Ericsson.

Global growth was continuing to exceed expectations, said the company, which now reckons that 900 million mobile phones will be sold this year.

Previously Sony Ericsson had forecast 10% growth compared to sales in 2005, when 780 million units were sold around the world.

The average sales price of a phone climbed by 4% to 149 euros. This was due to an increase in the number of more expensive phones in the product mix.

Sony Ericsson is half owned by Swedish telecoms company Ericsson, and half by Japanese electronics firm Sony. The joint owners decided on a dividend of 247 million euros, which was paid out on March 30th.

TT/The Local

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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