Ericsson
The second-quarter net loss was 213 million euros ($300 million), smaller than analysts anticipated, compared with net income of 6 million euros a year earlier, the company said in a statement today. Sales fell 40 percent to 1.68 billion euros, missing analysts estimates.
Sony Ericsson announced three cost-reduction programs and carried out 2,350 of 4,000 announced job cuts in the past year as it adjusted to falling prices and sales. Cash flow has been negative since the beginning of 2008, and Ericsson has said it will support the venture with more capital if necessary.
“We still believe the remainder of the year will be difficult for Sony Ericsson,” Chief Executive Officer Dick Komiyama said in the statement. “Our performance is starting to improve due to our cost reduction activities.”
The handset maker, based in London, has lagged behind competitors such as Samsung Electronics Co., Nokia Oyj and Palm Inc. in refreshing its product line to compete with Apple Inc.s iPhone and Research In Motion Ltd.s BlackBerry models. Sony Ericssons Satio phone, optimized for playing movies from an online library, is scheduled to ship in the fourth quarter.
Analysts in an SME Direkt survey predicted a 284 million- euro net loss on sales of 1.79 billion euros, based on 28 estimates.
Restructuring Push
Sony Ericssons gross margin, or sales minus manufacturing costs, dropped to 12 percent in the quarter from 23 percent a year earlier.
Restructuring charges will stay within the projected 500 million euros, with savings of 880 million euros annually taking effect in the second half of 2010, the company said.
The venture shipped 13.8 million phones, a 43 percent drop from a year earlier. The company estimated its market share was more than 5 percent in the second quarter, down from 6 percent estimated last quarter. The average selling price of its handsets rose to 122 euros from 120 euros in the first quarter and 116 euros a year earlier.
Sony Ericsson reiterated its forecast global industry handset unit sales would shrink at least 10 percent this year from the 1.19 billion sold in 2008. The venture is the worlds fifth-largest mobile-phone producer.
Nokia Oyj, the worlds largest mobile-phone maker, is scheduled to report results at 1 p.m. in Finland today.