Sony Ericsson surprises with return to profit

Michael Carroll
19 Apr 2010
Daily News

Sony Ericsson returned to profitability in 1Q10, despite reporting a 28% drop in handset sales year-on-year.

The firm said shipments of 10.5 million devices generated €1.4 billion ($1.89b) in sales during the quarter, down 19% on 1Q09, but were sufficient to turn around a €293 million loss a year ago into earnings of €21 million for the first quarter.


It blamed the lower handset sales on changes to its portfolio, and in particular a shift towards high-end devices. That shift helped it grow its average selling price 12% to €134.

President Bert Nordberg said the figures are the result of a cost reduction program, along with the “positive impact” of new products, such as the Xperia X10, the vendor’s first Android-based device.

“Increases in both gross and operating margins show that we are on the right track,” Nordberg said.

Gross margin was 31% in 1Q10 compared to 8% in 1Q09, while operating margin hit 1% compared with -21% in 1Q09.

The firm has also appointed Sony stalwart William Glaser as its new CFO, replacing Ulf Lilja.

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