14 DAY TRIAL // Sony Ericsson Mobile Communications AB has announced today that it expects to see negative financial results at the end of the first quarter of the ongoing year. According to the company, its net sales and net income before taxes in the time frame will be affected in a negative manner by the weak demand on the market. Another factor that would contribute to the company's lower results would be de-stocking in the retail and distribution channels.
The Swedish-Japanese joint venture of Sony Corporation and Telefonaktiebolaget LM Ericsson expects to be able to ship to the market around 14 million mobile phones during the first quarter of the year, while also expecting to see and average selling price (ASP) of EUR 120, but also states that the final results for Q1 might not be the ones predicted.
When it comes to gross margin, the mobile phone maker says that it should decrease both sequentially and on a yearly basis. The company expects to register the net income before taxes translated into a loss of around EUR 340 – 390 million. In addition, the figures do not include restructuring charges that should be of around EUR 10 – 20 million.
For what it's worth, the final results will be announced on April 17, and perhaps some numbers will change for the better. Yet the fact that the joint venture is not doing so well cannot be denied, especially given the most recent rumors according to which Ericsson might have plans to leave the family, with Sony intent on buying its share. It is rather uncertain to what extent Sony will then be able to move forward with the development of mobile phones, considering the fact that the company has seen some rather bad financial quarters lately. Not to mention that Sony Ericsson saw some losses in the last quarter of 2008 as well.