Profits slump at Sony Ericsson

Profits slump at Sony Ericsson
Swedish-Japanese phone maker Sony Ericsson announced on Friday fourth quarter net losses of €187 million ($247 million), as sales dropped 22 percent.

The company reported a loss of €25 million in the three months to September, according to previously published figures, and a profit of €373 million in the 2007 fourth quarter.

Sales in the three months to December 2008 came to €2.91 billion, down 22 percent from a year earlier, said the joint venture between Japanese electronics giant Sony and Sweden’s Ericsson.

“The mobile telephone market has been very badly affected (by the global economic crisis) and, as expected, the fourth quarter was very difficult,” Sony Ericsson head Dick Komiyama said in a statement.

“We expect a further deterioration of the market in 2009, especially in the first quarter,” Komiyama added.

The company announced another cost cutting exercise to save €180 million, in addition to an earlier plan aimed at savings of €300 million.

For 2008, it had a net loss of €73 million after a net profit of €1.1 billion in 2007, with sales falling to €11.24 billion from €12.91 billion.