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Sony Ericsson Posts Wide 1st-Quarter Loss
STOCKHOLM, Sweden, Apr 24, 2003 (AP Online via COMTEX) -- Wireless phone maker Sony Ericsson said it still hopes to post a profit for 2003, despite reporting a wide first-quarter loss Thursday amid a sharp drop in sales.
Sony Ericsson lost 104 million euros ($114.1 million) in the three months ending March 31, compared with a slight profit for the same period last year. The joint venture between Ericsson and Sony isn't publicly traded.
Revenue fell 39 percent to 806 million euros ($885 million) from 1.1 billion euros a year ago.
The company said its first-quarter shipments fell by 400,000 phones to 5.4 million, which likely will intensify questions about Ericsson's commitment to the company because Ericsson is wrestling with its own problem: returning to profitability after two years of steep losses.
The joint venture has seen market share slide sharply since Sony and Ericsson merged their struggling phone operations in October 2001.
At the time, Sony and Ericsson had a combined global share of 9 percent, but have since fallen to less than 6 percent. Finland's Nokia has 38 percent, followed by Motorola with 19 percent.
Ericsson has said Sony Ericsson must manage a market share of at least 7 percent to become profitable.
"This is certainly going to increase speculation that Ericsson will make an exit from Sony Ericsson," Jussi Uskola, an analyst at Nordea Securities in Helsinki, Finland, said of the phone maker's results.
Uskola said the steep decline in the average selling price of the company's phones since last year suggests that Ericsson's high-end P800 personal organizer hasn't sold widely outside Scandinavia.
Nina Eldh, a Sony Ericsson spokeswoman, said the company should ship more phones and increase its market share in the second quarter, which could improve its financial results. Sony Ericsson expects to get a boost from several new models this summer, including a new camera phone.
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KEYWORD: STOCKHOLM, Sweden SUBJECT CODE: 1700 http://www.sonyericsson.com