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Sony Ericsson reports profits plunge

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09:53 CEST+02:00
Mobile phone maker Sony Ericsson on Friday reported a €199 million ($297 million) net loss and a 42 percent drop in sales for the third quarter.

The joint Japanese-Swedish enterprise formed in 2001 said net earnings came to €164 million in the July-September period after a shortfall of €25 million in the corresponding period of 2008.

Third quarter sales fell 42 percent to €1.62 billion from 2.80 billion a year earlier. Compared with the second quarter sales were down 4.0 percent.

According to the company's management, the firm's owners have invested funds to strengthen the troubled phone maker's balance sheet. Ericsson has guaranteed half of the €350 million provided.

Sony Ericsson sold 14.1 million telephones during the period, up 2 percent on the second quarter, but down 45 percent on the corresponding period of 2008.

The company forecast that the global market for mobile telephones would decline 10 percent in comparison with 2008. The firm estimated that Sony Ericsson's share of the market came in at around 5 percent during the third quarter.

The company has suffered from delays in its operations on the smartphone market, currently dominated by Apple's iPhone and the Blackberry by Research in Motion.

But outgoing head Dick Komiyama said: "Having refreshed our brand we are now better positioned to support the launch of new products ... in fourth quarter 2009."

Komiyama was replaced on Thursday by Bert Nordberg.

Sony Ericsson is not quoted on the stock exchange and its accounts remain integrated with those of Sony and Ericsson.

In early trade on the Stockholm exchange Ericsson was showing a gain of 1.5 percent to 72.30 kronor on an overall market that was 0.8 percent stronger.

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