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Sony Ericsson reports profits slump

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Sony Ericsson reports profits slump
12:43 CEST+02:00
Swedish-Japanese mobile phone manufacturer Sony Ericsson on Tuesday reported a steep decline in net profits, explained by the impact on sales of the earthquake and tsunami in Japan.

The group, the sixth-biggest player in the global market, reported a net profit of €11 million ($15.7 million), down from the €21 million a year earlier, representing a drop of 48 percent.

The company meanwhile reported a sales slump of 18.5 percent, to €1.15 billion, as the number of units shipped during the quarter plunged 23 percent to 8.1 million.

Sony Ericsson attributed that drop to a "decline in the number of feature phones shipped, introduction of new products towards the end of the quarter and seasonality."

Company chief executive Bert Nordberg also explained that "the Japan earthquake made it a challenging quarter operationally and we are experiencing some disruptions to our supply chain."

"We will continue to evaluate the situation," he said in the earnings statement.

Despite the downward trend, Nordberg emphasised that the company, which returned to profit last year after a 2009 deep in the red, had seen its "profitability continue as we accelerate our shift towards an Android-based smartphone portfolio."

During the first quarter, smartphones accounted for more than 60 percent of total sales for the company, which holds a five percent share of the global market for such devices in terms of units sold and a three-percent market share in terms of value.

Going forward, the company said it expected to see "modest growth in total units in the global handset market for 2011."

Following Tuesday's announcement, Sweden's Ericsson's shares were flat on a

Stockholm stock exchange up 1.08 percent.

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