14 DAY TRIAL // Mobile phone maker Sony Ericsson announced on Thursday its financial results for the second quarter of the ongoing year, posting a 213-million-Euro ($299-million) net loss. Compared with the previous quarter, when it registered a 370-million-Euro net loss, the company informed about a net loss of 283 million Euro for the time frame, before taxes for the quarter and excluding restructuring charges.
Even so, it seems that sales went down both on a yearly basis and sequentially. The 13.8 million units shipped in the period represented a drop of 43 percent year-on-year, and a five-percent decrease compared with the previous quarter of the year. In addition, the company also announced sales of 1,684 million Euro, a 40-percent dive compared with the same quarter a year ago.
According to Sony Ericsson, the continuous drop it registered is the result of the challenging market conditions in all regions. However, although it shipped lower volumes and registered decreased sales, the mobile phone maker informed that its gross margin improved, compared with the previous quarter, thanks to “a more favorable product mix and less material write-off costs than the previous quarter.” The higher gross margin helped it register a lower loss, it added.
“As expected, the second quarter was challenging and we still believe the remainder of the year will be difficult for Sony Ericsson. Our focus remains on bringing the company back to profitability and growth as quickly as possible, and our performance is starting to improve due to our cost reduction activities. The new product portfolio that integrates communications, entertainment and social media applications should contribute to healthier topline development when shipments start later this year,” Dick Komiyama, president, Sony Ericsson. said. “We remain confident that the actions we are taking will further improve our financial situation and strengthen Sony Ericsson’s competitiveness.”
According to the company, the global mobile phone market is still expected to plunge by around ten percent, compared with the previous year. The estimated market share Sony Ericsson enjoyed globally was of five percent in the quarter. The mobile phones and services the company plans to launch during the ongoing year should help it gain a better position on the market. The devices that are included here are Aino, Satio and Yari, while the services comprise the content-delivery platform PlayNow arena, which features an application store and offers movies for download via PC.