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Record figures for Sony Ericsson

Swedish-Japanese mobile phone maker Sony Ericsson has reported record figures for the third quarter. The company's results for the period leaked out in advance in an internal email.

Shares in Ericsson, which owns half the joint venture, rose 4 percent on the Stockholm exchange after the leak.

Business is improving for the mobile maker after several crisis years. The company, which had been making losses in the billions of kronor, is now making ever larger profits.

The figures show the company made a third quarter profit of €433 million before tax, or roughly 4 billion kronor. The figures represent an increase in income of 187 percent compared with the same period last year, and is far higher than most analysts expected.

Sales increased to €2.9 billion, compared to expectations of €2.4 billion. The company delivered 19.8 million mobile handsets in the third quarter, compared to the 16.6 million analysts had expected. The company judges that it now has a world market share of 8 percent.

The company has snatched market share from rivals in the sale of advanced models, such as those featuring music players and cameras. This segment has been particularly profitable for Sony Ericsson, although it has complemented its product portfolio with cheap, basic models targeted at developing countries.

Åse Lindeskog, head of press relations at Ericsson, said that human error was to blame for the early release of the figures.

“The wrong distribution list was used by mistake, and an external person got the figures. We then decided that we might as well release them,” she told news agency TT.

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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