14 DAY TRIAL // Today, Swedish-Japanese mobile phone maker Sony Ericsson reported the financial results for the first quarter ended March 31, 2010, and posted a profit of Euro 21 million before taxes. These results show the company's return to profitability after a series of quarters marked by losses, while illustrating the positive results of Sony Ericsson's cost reduction programme, the company notes.
During the first quarter of the ongoing year, the handset vendor shipped a number of 10.5 million units, a 28 percent decrease when compared to the same time frame a year ago. However, the company underlines that it worked on streamlining its portfolio during the past 12 months and that it focused on the launch of high-end devices. During the three months period, Sony Ericsson registered sales of Euro 1,405 million, a 19 percent drop compared on a yearly basis, yet the average selling price went up 12 percent to Euro 134, courtesy of new flagship models being delivered to the market.
Bert Nordberg, president, Sony Ericsson commented, “We are pleased to see the positive impact of both the launch of new products and the business transformation programme improving the company’s results. The Xperia X10, our first Android-based Communication Entertainment device featuring signature Sony Ericsson applications Timescape and Mediascape, and Vivaz, a beautifully designed, touch-screen Symbian phone started shipping towards the end of the quarter. Both models have been well received by global customers.”
The mobile phone maker also announced increased gross margin both on a quarterly and yearly basis, mainly due to “a more favorable product mix.” The company retained a net cash position of Euro 563 million at the end of Q1 2010, and announced that its parent companies guaranteed additional external funding of Euro 150 million on a 50/50 basis. It had a number of 8,450 employees at the end of Q1, following a restructuring programme aimed at reducing annual operating expenses by Euro 880 million.
“Increases in both gross and operating margins show that we are on the right track to build the correct cost structure for our business organization and strategy. We will continue to work through the transformation programme to ensure that we are competitive,” Nordberg added. Sony Ericsson's market share went down one percentage point during the quarter and is estimated to be of around 4 percent at the moment. The company expects a slight growth in units in the worldwide mobile phone market during the ongoing year.