Sony Ericsson reports flat Q4

Michael Carroll
Daily News

Sony Ericsson’s recovery continued in 4Q10 with the firm recording its fourth consecutive quarterly profit, however the results disappointed analysts who expected better.

The vendor generated a modest profit of €8 million during the period, overturning a €167 million loss in 4Q09, despite a 3.4 million year-on-year fall in device shipments to 11.2 million units.

That decline saw sales income fall from €1.7 billion in 4Q09 to €1.5 billion in the most recent quarter, however the firm improved gross margins from 23% to 30% in 4Q10, and posted a positive operating margin of 3% compared to a loss of 2% the previous year.

Chief Bert Nordberg attributed the turnaround in the firm’s fortunes to the success of its Android-based handsets after the firm shipped nine million units running the Google software during the quarter.

Behind the scenes changes to the organisation of the firm also contributed to the return to profitability in 2010, following two years of losses.

The firm slashed €880 million from its annual operating expenses after completing a transformation program that boosted its cost of sales ratio, and reduced its global workforce by 4,000.

One Swedish-based analyst told Bloomberg the results are disappointing, with volumes down due to a lack of new models during the quarter.

Ohman Fondkommision analyst Helena Nordman-Knutson predicted the situation would get worse, with no new products in the cards until end-March, the news site said.

The vendor estimates it grabbed a 4% share of global device shipments in 2010, based on total shipments of 1.2 billion units, and predicts modest growth in global shipments for 2011.

Related content