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Sony Ericsson swings to Q4 loss
Source: Agencies |
January 16, 2009, Friday
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MOBILE phone maker Sony Ericsson today said it swung to a net loss in the fourth quarter, mainly pressured by lower volumes on the back of the financial crisis.
The Sony Corp. and LM Ericsson AB joint venture reported a net loss of €187 million (US$245 million), in the October to December period, compared with a year-earlier profit of €373 million.
It also reported a loss for the full year 2008 of €73 million, compared with profit of €1.1 billion a year earlier.
Sales in the quarter came to €2.9 billion, down 23 percent from €3.8 billion in the same period in 2007.
The company said its €300 million (US$395 million) cost savings plan is running "on track," but that it plans to increase the saving by shaving an extra €180 million off its operating costs. The full effect of that addition is expected by the end of this year, it said, without disclosing details on how those extra savings would be achieved.
Company President Hideki Komiyama described 2008 as a "tumultuous year," saying the fourth quarter had been a challenging period.
"We foresee a continued deterioration in the marketplace in 2009, particularly in the first half," he said in a statement.
The company said it expects the global handset market to contract as well as a continued fall of the average selling prices of handsets.
It said its estimate of the global handset market in 2008 had been revised to 1.19 billion units -- 6 percent growth. It had previously estimated growth of 10 percent.
Sony Ericsson shipped 24.2 million units in the fourth quarter, which was a 21 percent drop from the fourth quarter last year.
The Sony Corp. and LM Ericsson AB joint venture reported a net loss of €187 million (US$245 million), in the October to December period, compared with a year-earlier profit of €373 million.
It also reported a loss for the full year 2008 of €73 million, compared with profit of €1.1 billion a year earlier.
Sales in the quarter came to €2.9 billion, down 23 percent from €3.8 billion in the same period in 2007.
The company said its €300 million (US$395 million) cost savings plan is running "on track," but that it plans to increase the saving by shaving an extra €180 million off its operating costs. The full effect of that addition is expected by the end of this year, it said, without disclosing details on how those extra savings would be achieved.
Company President Hideki Komiyama described 2008 as a "tumultuous year," saying the fourth quarter had been a challenging period.
"We foresee a continued deterioration in the marketplace in 2009, particularly in the first half," he said in a statement.
The company said it expects the global handset market to contract as well as a continued fall of the average selling prices of handsets.
It said its estimate of the global handset market in 2008 had been revised to 1.19 billion units -- 6 percent growth. It had previously estimated growth of 10 percent.
Sony Ericsson shipped 24.2 million units in the fourth quarter, which was a 21 percent drop from the fourth quarter last year.
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