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Sony Ericsson reports smaller than expected losses

Mobile phone maker Sony Ericsson on Friday posted a third quarter net loss of €25 million ($33.7 million) down from a net gain of €267 million a year earlier.

The company also saw its operating income slump to €33 million from €393 million in the July-September period last year.

“As expected the third quarter has continued to be challenging for Sony Ericsson,” company chief executive Dick Komiyama said in the earnings statement.

Sony Ericsson booked sales of €2.8 billion in the third quarter, a 10 percent drop from the €3.1 billion it posted a year earlier.

The company also saw the number of phones sold during the quarter slip to 25.7 million from 25.9 million a year earlier, but the figure was a slight improvement over the second quarter, when 24.4 million devices flew off the shelves.

In July, Sony Ericsson announced that it would lay off 2,000 of its 12,000 employees worldwide before the end of the year, as it scrambled to cut costs amid difficult market conditions.

“Our target remains to reduce operating expenses by €300 million annually by the end of the second quarter 2009, with the full effects expected to appear in the second half of 2009. These plans are progressing in line with expectations,” Komiyama said.

Sony Ericsson, which is not quoted on the stock market, was formed in 2001 through the merger of Ericsson of Sweden, world leader in mobile phone networks, and Japanese electronics giant Sony.

Following the announcement, Ericsson saw its stock price soar 8.3 percent in the first minutes of trading in a market up on average nearly four percent.

SWEDEN AND UKRAINE

Ericsson suspends all Russia operations indefinitely

Swedish network equipment maker Ericsson said Monday that it was suspending all of its Russian operations over the war in Ukraine for the foreseeable future.

Ericsson suspends all Russia operations indefinitely

The telecom giant already announced in late February that it would stop all deliveries to Russia following Moscow’s February 24 invasion of Ukraine.

“In the light of recent events and of European Union sanctions, the company will now suspend its affected business with customers in Russia indefinitely,” Ericsson said in a statement.

The company added that it was “engaging with customers and partners regarding the indefinite suspension of the affected business.”

“The priority is to focus on the safety and well-being of Ericsson employees in Russia and they will be placed on paid leave,” it said.

READ ALSO: How has Sweden responded to Putin’s war in Ukraine so far?

Hundreds of Western firms ranging from Ikea to Coca-Cola, Goldman Sachs and McDonald’s have stopped operations in the country since the invasion, with French banking group Societe Generale announcing Monday it was selling its stake in Russia’s Rosbank.

Ericsson has around 600 employees in Russia, and is a “major supplier to the largest operator MTS and the fourth largest operator Tele2,” a company spokeswoman told AFP, adding that together with Ukraine, Russia accounts for less than two percent of revenue.

As a result, the equipment maker said it would record a provision for 900 million Swedish kronor ($95 million, 87 million euros) for the first quarter of 2022 for “impairment of assets and other exceptional costs,” though no staff redundancy costs were included.
Ericsson is due to publish its first quarter earnings on April 14.

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