Sony Ericsson slims loss but still in the red

Natalie Apostolou
19 Oct 2009
Daily News

Sony Ericsson has posted a lackluster Q3 result, but has slimmed its losses with a pretax loss of €199 million ($296.5 million).

The handset-maker reported a €283 million loss in the second quarter, a blowout compared to a €25 million loss in the same period last year, and said it had already drawn down more than half of a new €455 million euro credit line.

“The reduced loss was due to better gross margin, as well as reduced operating expenses,” Sony Ericsson said in a statement.

Sales in the quarter fell more than 40% to €1.6 billion, compared with €2.8 billion in the same period in 2008. Units shipped in the July-September period amounted to 14.1 million, up 2% on the last quarter, but down 45% on the year.

In April, Sony Ericsson announced it would slash 2,000 jobs, on top of 2,000 jobs cut last year, to lower costs. In total, it aims to reduce operating costs by €880 million, with the full effect of the measures expected in the second half of next year.

The company retained its gloomy prognosis for the market this year, predicting a further contraction of about 10%.

It said the new loan would strengthen its balance sheet and improve liquidity.

The vendor said €155 million had been drawn down by the end of September and €100 million was drawn down at the beginning of October.

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