Sony Ericsson hails record quarter

Profits at mobile phone maker Sony Ericsson more than doubled in the last quarter of 2006, rising to €502 million from €206 million in the same period in 2005.

The Swedish-Japanese company sold 26 million mobile phones during the period, compared with 16.1 million the previous year. Sales rose from €2.31 billion to €3.782 billion.

CEO Miles Flint said the record figures were due to the popularity of the company’s camera and music phones.

“Earlier investments in R&D and marketing have enabled us to expand the portfolio and strengthen the brand to increase consumer and operator appeal,” Flint said.

“Our target is to become one of the top three players in the industry, and the momentum we established in 2006 makes this an achievable ambition.”

The results beat the expectations of analysts, who according to a survey by Reuters had predicted pre-tax profits of €428 million and sales of €3.207 billion.

Profits over the whole of 2006 were €1.298 billion, compared with €512 million in 2005.

The company said its market share grew 2 percent during the year to reach around 9 percent at the end of 2006.

The average retail price of Sony Ericsson products was somewhat higher than expected during the final quarter, due to a favourable market situation and continued high demand for the company’s phones. The company saw particularly strong growth on new markets such as Latin America and in Europe.

“We are no longer some kind of niche player, as some people have liked to call us,” said Flint in a video-conference with journalists.

Sony Ericsson is a joint venture between Ericsson of Sweden and Sony Corporation of Japan. The company is headquartered in London.


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.