High-end phones and cost cuts see profit
By Louise Nordstrom |
April 17, 2010, Saturday
|
Print Edition
Print Edition
MOBILE phone maker Sony Ericsson posted its first quarterly profit in nearly two years yesterday, boosted by gains from high-end devices such as smartphones and cost cuts.
Net profit for the first quarter was 21 million euros (US$29 million), compared with a loss of 293 million euros a year earlier.
Although sales dipped in the three months ended March 31 to 1.4 billion euros, from 1.74 billion euros, the gross margin of the LM Ericsson and Sony Corp joint venture still jumped to 30.6 percent from a previous 8.4 percent.
Sony Ericsson CEO Bert Nordberg said new high-end devices, including the smartphones Xperia X10 and Vivaz, which began shipping at the end of the first quarter, had been "well received" by the market.
Operating costs dropped to 423 million euros from 528 million euros, helping to bump up the company's bottom-line figures.
"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," Nordberg said in a statement.
In 2008, Sony Ericsson launched a cost-cutting program under which it had by the end of the quarter slashed its global work force by around 3,150 people to 8,450.
Sony Ericsson, which intends to cut operating costs by 880 million euros, said the program is running according to plan, with full benefit still expected in the second half of this year. Total costs associated with the program now amounts to 342 million euros.
The group said it shipped 10.5 million units in the quarter, a 28 percent decline compared with the same three months in 2009, but was up from the 14.6 million units shipped in the fourth quarter of last year.
Net profit for the first quarter was 21 million euros (US$29 million), compared with a loss of 293 million euros a year earlier.
Although sales dipped in the three months ended March 31 to 1.4 billion euros, from 1.74 billion euros, the gross margin of the LM Ericsson and Sony Corp joint venture still jumped to 30.6 percent from a previous 8.4 percent.
Sony Ericsson CEO Bert Nordberg said new high-end devices, including the smartphones Xperia X10 and Vivaz, which began shipping at the end of the first quarter, had been "well received" by the market.
Operating costs dropped to 423 million euros from 528 million euros, helping to bump up the company's bottom-line figures.
"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," Nordberg said in a statement.
In 2008, Sony Ericsson launched a cost-cutting program under which it had by the end of the quarter slashed its global work force by around 3,150 people to 8,450.
Sony Ericsson, which intends to cut operating costs by 880 million euros, said the program is running according to plan, with full benefit still expected in the second half of this year. Total costs associated with the program now amounts to 342 million euros.
The group said it shipped 10.5 million units in the quarter, a 28 percent decline compared with the same three months in 2009, but was up from the 14.6 million units shipped in the fourth quarter of last year.
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